Government Announces €7.4bn Stimulus Package

The Government announced its July Stimulus package yesterday to aid Ireland’s economic recovery following the Covid-19 pandemic.

The July Stimulus involves a cash injection of over €5bn across a broad range of measures, as well as a loan guarantee scheme of €2bn for businesses affected by the pandemic.

While there was some speculation leading up to yesterday’s announcement that the Capital Gains Tax Rate would be reduced from the current rate of 33%, somewhat disappointingly this did not happen.

We have outlined below some of the key measures:

With effect from September 2020, the standard rate of VAT has been reduced from 23% to 21% and this reduction will remain in place until February 2021.
Companies that were profitable in 2019 but have suffered losses in 2020 due to Covid-19, will be allowed to carry back trading losses immediately. This will result in an immediate refund of some or all of Corporation Tax paid.
A new Income Tax relief will be available for self-employed individuals who were profitable in 2019 but suffered losses for 2020 as a result of Covid-19.
The Employment Wage Support Scheme will replace the Temporary Wage Subsidy Scheme and will run until April 2021.
The Restart Grant has been extended to a broader range of SMEs, including B&Bs. The maximum funds available to SMEs has also been increased to €25,000.
A waiver of Commercial Rates will remain in place until September 2020 for most businesses.
The Pandemic Unemployment Payment has been extended until March/April 2021.
A new Stay and Spend incentive has been introduced which will allow individuals to claim a maximum credit of €125 when they spend €625 or more on accommodation and food in Ireland between October and April.

For further information in relation to the measures introduced, please click here.

If you would like to discuss how any of the tax measures announced in the July Jobs Stimulus affect you or your business, please contact us.

Please note: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

Warren & Partners are a boutique Irish tax and business advisory firm based in Ballsbridge, Dublin. Our experienced-team of tax advisors will create unique tax solutions for your specific business needs.