Last week the Government announced Ireland's Stimulus Package to reboot the economy and help small businesses survive and maintain employment in these uncertain times as we cope with the Covid Pandemic. It has been much criticised for excluding proprietary directors from the wage subsidy scheme which will affect many of the "Mum and Pop" businesses which we have in Cork.
Here is a more detailed breakdown of the key benefits for SMEs and Self-Employed proposed in the stimulus package announced last week. This is general advice and businesses should speak to their Accountants or Solicitors on their specific circumstances.
• Employment Wage Subsidy Scheme to replace Temporary Wage Subsidy Scheme by end of August- to qualify, employer must be able to demonstrate that in the majority of cases they are operating at no more than 70% in either turnover of the employer’s business or the customer orders received by the employer by reference to the period from July to December, 2020 compared to the same period in 2019. Changes in financial benefits - to flat-rate subsidy on the basis of numbers of paid employees on payroll. The level of the subsidy will depend in the gross income levels fo individual employees.
• Increases in Restart Grants – minimum Grant increases from €2,000.00 to €4,000.00 and maximum Grant increases from €10,000.00 to €25,000.00. Scheme extended to businesses with 250 employees or less, turnover of less than €100,000 per employee and reduced turnover of minimum 25% as a result of Covid 19. Applications through Local Authorities in due course, or, for non-rated B&Bs, through Fáilte Ireland
• Extension of Commercial Rates Waiver until end of September, 2020 (with limited exceptions)
• Covid-19 Credit Guarantee Scheme to back loans from banks to SMEs on loans of between €10,000 and €1m with terms of no longer than 7 years. Currently will guarantee up to 80% of loan. Applications through participating lenders
• Affordable credit - additional resources for MicroFinance Ireland and the Local Enterprise Offices. to include measures to reduce interest rates on lending for micro and small businesses, including grants equivalent to 0% interest on the first year of SBCI and MFI loans and the Future Growth Loan Scheme, so businesses with up to 499 employees can invest for the longer-term at competitive rates.
• Legislative basis for warehousing of tax liabilities - no interest will be charged on payments due by employer for PAYE and employment contributions and VAT payments for 12 months after the end of the Covid 19 restricted trading period (and at a reduced rate of 3% after that) – but provided all Returns are filed and other liabilities are paid on time
• Income tax relief to provide liquidity to self-employed – once-off income tax relief to allow self-employed individuals carrying on a trade or profession, who were profitable in 2019, but, as a result of Covid-19, incur losses in 2020 (and certain unused capital allowances) up to a maximum amount of €25,000.00 carried back and deducted form their profits for 2019
• Enhanced corporate tax loss relief to provide liquidity to small business – temporary acceleration or corporation tax loss relief for tax compliant companies – and which allows companies to project trading losses for the current accounting period and make an early claim to carry back those losses for offset against taxable profits for the previous accounting period to speed up a refund of some or all corporation tax for the previous period. Companies can lodge a claim once at least 4 months of the current accounting period have elapsed (normally 9 months). Companies must be tax compliant and must have incurred or expect to incur a trading loss in an accounting period which includes some or all of the period from 1st March, 2020 to 31st December, 2020. The maximum amount of the estimated loss which qualifies for early carry back is 50%. The remaining carry-back will qualify for carry back in due course under normal rules
• Amendments to Cycle to Work Scheme – limit on allowable expenditure increased to €1,500 for ebikes and €1,250 for other bicycles and related safety equipment
• A Stay and Spend incentive for the accommodation and food sector, the purpose of which is to boost out-of-season demand by way of an income tax credit on qualifying expenditure to customers of up to €125.00 per person.
• Temporary lowering of standard rate of VAT from 23% to 21% for period from 1st September 2020 to 28th February 2021
For those in the Hospitality Industry, here is the Failte Ireland guide to these supports:
Then why not get in touch, you can email your stories to email@example.com or you can send us a message on social media.