At the height of the pandemic, the Irish authorities decided to employ a tried-and-tested strategy to support sectors most in need by adjusting the VAT rate in the sectors most affected by the crisis. Since November 2020, the hospitality and tourism sector has benefited from a further reduced nine percent VAT rate, down from 13.5 percent. Covering entertainment, hotels and holiday accommodation, food and drinks, and hairdressing services, this reduced rate will expire on December 31, 2021.
Some measures introduced at the height of the pandemic are being unwound though. For instance, a commercial rates waiver has ended, which had covered retail, hospitality, and personal and health services premises that had been forced to close due to the pandemic.
Further, the tax debt warehousing scheme is drawing slowly to a close. This scheme allows businesses to defer payment of certain VAT and PAYE debts that they incurred during the pandemic, without payment of interest, until December 31, 2022.
Support For Individuals And Employers
The Employment Wage Subsidy Scheme (EWSS), which provides support for employers, based on the number of workers on their payroll, is being extended, the Government announced in the newly released Budget, before it is phased out.
Meanwhile, individuals who lost their jobs or businesses as a result of the pandemic between March 13, 2020 and July 7, 2021, will remain eligible to receive payments under the COVID-19 Pandemic Unemployment Payment, which will also be wound up.
Existing tax arrangements for those working remotely were formalized in the recent Budget, meaning that a 30 percent tax deduction can be claimed by taxpayers in relation to heating, electricity, and internet expenses incurred whilst working from home.
Grants And Direct Payments
Various grants, loan schemes, and credit guarantee programmes were introduced by the Irish Government, in addition to direct payment schemes, to help businesses cope with the financial fallout of the pandemic. Some of these have ended, some are being phased out, and some are set to continue for now.
For instance, the Enterprise Support Grant provides self-employed people pushed into unemployment by the pandemic with a restart grant of up to EUR1,000. The scheme is set to remain in place for the rest of the year, for eligible self-employed taxpayers closing their Pandemic Unemployment Payment entitlement.
The Trading Online Voucher, available via Local Enterprise Offices, provides financial assistance up to EUR2,500 for businesses with up to 10 employees, while the COVID-19 Business Financial Planning Grant provides up to a maximum of EUR5,000 in support for businesses looking to develop a sustainable financial plan.
The Sustaining Enterprise Fund and the Accelerated Recovery Fund remain open to applicants (in the latter case funding must be approved and drawn down before the end of the year), and general grants are also available via Enterprise Ireland, IDA Ireland, and Local Enterprise Offices.
Direct payments have been available for businesses severely impacted by the lockdown and subsequent restrictions, under the COVID Restrictions Support Scheme. Payments made by the Revenue under the scheme are in the form of Advance Credits for Trading Expenses (ACTE). Claim periods will continue until the end of the year but the Government is in the process of closing this scheme.
The Business Resumption Support Scheme, which also provides ACTE payments, is open for applications until the end of November.
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