Budget 2021
13 October 2020
Last Updated: 13 October 2020
Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.
Personal Taxation (from 1st January 2021)
• Dependent relative tax credit increased from €70 to €245
• USC 2% threshold adjusted for minimum wage increase (€10.20 instead of €10.10 from 1st January 2021).
• PRSI threshold has also been adjusted in respect of the minimum wage increase, from €10.10 to €10.20.
Covid
• For businesses there is a new Covid Restrictions Support Scheme, where grants will be paid to those affected by restrictions imposed from Levels 3 – 5 of the Living with Covid strategy.
• Employment Wage Subsidy Scheme (EWSS) expected to be extended past March 2021.
Business Taxation & Regulation
• Earned income tax credit increased by €150 to now equal the Employee Tax Credit of €1,650
Relevant Contracts Tax and Construction Industry
• No changes noted
Indirect Taxes
• Temporary reduction in VAT rate for Tourism and Hospitality items from 13.5% to 9% until December 2021
• Increase in farms flat rate addition from 5.4% to 5.6%
Stamp duty
• Consanguinity relief extended until December 2023
Carbon Tax
• Increase in rate by €7.50 to €33.50 per tonne. Household fuels will not be affected until next May.
Capital Taxes
• No changes noted
(Local) Property Tax (LPT)
• No changes noted
Miscellaneous Provisions & Announcements
•50c on pack of 20 cigarettes.
• Illness benefit will now be paid after 3 days instead of 6 days.
• Christmas bonus to be paid to those in receipt of Pandemic Unemployment Payment (PUP) for more than 4 months
Summary Statistics
| Budget 2021 | Budget 2020 | ||
| Capital Gains Tax Rate | 33% | 33% | |
| Capital Acquisitions Tax Rate | 33% | 33% | |
| Income Tax Rates | |||
| Lower | 20% | 20% | |
| Higher | 40% | 40% | |
| DIRT Tax | |||
| 39% (39% – where payments made less frequently than annually) | 39% (39% – where payments made less frequently than annually) | ||
| Tax Credits | |||
| Single Person | €1.650 | €1,650 | |
| Married Couple | €3,300 | €3,300 | |
| PAYE Credit | €1,650 | €1,650 | |
| Home Carer Credit | €1,600 | €1,500 | |
| Earned Income Tax Credit | €1,650 | €1,350 | |
| Rate Bands | |||
| Single/widowed | €35,300 | €35,300 | |
| Single/widowed with dependent children | €39,300 | €39,300 | |
| Married -one income earner | €44,300 | €44,300 | |
| Married – two income earners | €70,600 | €70,600 | |
| PRSI | |||
| Contribution Ceiling | No limit | No limit | |
| Universal Social Charge | |||
| < €13,000 | Exempt | Exempt | |
| € 0 – €12,012 | 0.5% | 0.5% | |
| €12,013 – €19,874 | 2.0% | ||
| €12,013 – €20,687 | 2.0% | ||
| €19,874 – €70,044 | 4.50% | ||
| €20,687 – €70,044 | 4.50% | ||
| €70,044 – €100,000 | 8% | 8% | |
| Self employed income > €100,000 | 11% | 11% | |
| PAYE income in excess of €100,000 | 8% | 8% | |
| Age >70/medical card holders with income < €60,000 – Max rate | 2.0% | 2.0% |
Whilst every care has been taken in the production of this budget summary, neither Royal Canal Financial Control Services nor Ronan Duffy and Co. can be held responsible for any action taken or deferred, resulting from any errors contained therein. For a more comprehensive summary please refer to the government press release.