Government announces €5bn package to reboot economy

Posted in Business Growth, Good Advice, Uncategorized

The Government has agreed a €5bn package to boost economic recovery and get people back to work following the recent Covid-19 pandemic. So what does it mean for your business?

Summary of measures

The measures include a cut of 2% in the standard VAT rate from 23% to 21% for six-months from September next, a €100m package of supports to fund training and apprenticeship places and a €450m package of business supports.

The Stimulus includes over €4 billion of direct expenditure, €1 billion of taxation measures to support businesses with €2 billion in credit guarantees included.

From 1 September, The Temporary Wage Subsidy Scheme (TWSS) will be replaced with the Employment Wage Subsidy Scheme (EWSS). Employers, whose turnover has fallen 30%, will receive a flat-rate subsidy of up to €203 per week per employee. Certain workers previously excluded from the TWSS, including seasonal workers and new hires, will be allowed to enter the EWSS early, and can receive payments during July and August.

The Restart Grant for Enterprises is being extended to a broader base of SMEs and expanded €300 million, bring the total of the Restart Grant to €550 million.

There will also be a grant for the self-employed who do not qualify for business restart grants, and some increases in community employment schemes.

With limited exceptions, all businesses will be granted a waiver of commercial rates for the six months to end-September 2020, at a total cost of €600 million.

A package of liquidity and enterprise investment measures worth €55 million will be put in place to support small and micro companies through additional resources for MicroFinance Ireland and the Local Enterprise Offices.

In addition, to support the badly impacted hospitality and tourism sectors a new Stay and Spend Incentive will see any taxpayer (who spends over €625 on accommodation, food and non-alcoholic drinks, between October 2020 and April 2021) able to claim up to €125 through a tax credit.

The Government will also pass legislation to confirm the previously announced warehousing of tax liabilities. This will allow businesses affected by Covid-19 to delay payment of their PAYE and VAT debts in part of in full for a set period with no interest or penalties

Supports to people without jobs

The Pandemic Unemployment Payment, due to end in August 2020, is being extended by 7 months until 1 April 2021. The Pandemic Unemployment Payment has played a huge role in sustaining household incomes through the worst of the crisis. Between now and April, there will be a gradual reduction in payment level, bringing payments in line with existing social welfare levels over time. The scheme will close to new claimants from 17 September 2020.

A €200 million investment in training and education, skills development, work placement schemes and recruitment subsidies will help those who have lost their jobs to find a new one. These include : 10,000 additional places on work placement and experience schemes for those unemployed for over 6 months, 12,500 additional places funded through the Training Support Grant.

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