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On the 13th October the government unveiled its Budget 2021, outlining its financial measures and plans against the backdrop of COVID-19.
The Budget looks to prioritise business investment in light of the unprecedented impact of the pandemic plus Brexit uncertainty. With these twin crises in mind, this year’s Budget is worth more than €17 billion. It also comes on top of the measures announced previously in the €7 billion July stimulus package.
A €3.4bn Recovery Fund has now been unveiled, helping to secure jobs and support an extension of the Employment Wage Subsidy Scheme into 2021 if required. Employees who need to self-isolate due to COVID-19 will be able to access sickness benefit on day three instead of day six, which will particularly help those on lower pay. Furthermore, the commercial rates holiday is being extended, helping businesses cut their costs.
Infrastructure spending has also been touted as key to economic recovery, both during the pandemic and after it. So the government has announced a €10.1 billion spending package on infrastructure throughout the coming 12 months, bringing in work for the construction sector especially. Building projects will include new schools and homes, as well as improvements to public transport.
One of the most notable measures in the Budget is the slashing of the VAT rate for businesses in the hospitality and tourism sectors, from 13.5% to 9%.
The new lower rate will kick in from the 1st November. Leo Varadkar, Tánaiste and Minister for Enterprise, Trade and Employment, has voiced his hopes that this will ease pressure in the sector and go some way to aiding recovery.
The new COVID-19 Restrictions Support Scheme (CRSS) has also been unveiled, offering additional targeted support to businesses that have had to close temporarily (or who have made a substantial loss) due to COVID-19 measures. Find out more.
Measures to support businesses in adapting to Brexit also now include the following:
The government also announced a number of further investments focussed on recovery, to include:
In addition to the measures above, Paschal Donohoe TD, Minister for Finance, has said that no changes will be made to the income tax credits or tax bands.
The pandemic has seen large sections of the population working remotely. With this unlikely to change any time soon, the working from home allowance will stay at €3.20 per day. Applications for rebates can now also include heating and electricity costs as well as broadband.
The entire Budget 2021 for Ireland and all the measures in detail can be found on the Budget 2021 page of the Citizens Information website.
The above measures are broadly very welcomed by businesses across the Irish Republic but they’re set to be temporary. Longer term support that allows businesses to innovate and grow is also crucial to Ireland’s ongoing economic success. The government’s answer? R&D Tax Credits.
R&D Tax Credits have been around in Ireland since the early 2000s and are offered by the government as a tax incentive for companies to grow and innovate. Administered by Revenue, the scheme works by covering a large proportion of the costs a company incurs on eligible R&D (research and development) activities.
The scheme is incredibly generous too, with as much as €37.50 for every €100 of R&D expenditure claimable.
Much more detail about R&D Tax Credits can be found on our R&D Tax Credits page, so we recommend having a read through. But broadly speaking, the R&D Tax Credits scheme works by providing a Corporation Tax rebate to reflect R&D expenditure, if the company made a profit. Loss making companies can receive the benefit in cash instalments instead.
Companies are likely to be eligible for R&D Tax Credits if they:
To qualify for R&D Tax Credits, a company’s research and development activities must involve investigative, experiment or systemic tasks. This activities must be in the field of science or technology, and benefit the wider industry the company operates in (so not just the company itself). R&D projects must also involve basic or applied research, or experimental development, that looks to resolve a specific technological or scientific uncertainty.
If you’re not sure, this is something the Myriad Associates team will be pleased to guide you on - get in touch.
Companies need to claim their credit on their Corporation Tax return. Applicants must also ensure that all requirements are met before applying - and this is the tricky bit.
At Myriad Associates our Dublin-based team is here to help you put together a 100% successful, optimised R&D Tax Credits claim that stands up to Revenue scrutiny. Don’t make one of the common mistakes in applying - and with thousands or tens of thousands of euros at stake, why take the risk?
Ask a question or start your claim today by sending a message or calling our team on +353 1 566 2001.