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Economic Recovery Plan - what businesses need to know
Today the government announced an Economic Recovery Plan, here are the key points for businesses:
The new €3.5 billion Economic Recovery Plan was announced today, 01 June 2021. The plan outlines the key supports for businesses as they attempt to recover from the impact of COVID-19.
Here are the key points for businesses and the self-employed:
1. Employment Wage Subsidy Scheme (EWSS) to continue to the end of the year
The EWSS, which had been due to cease on 30 June, will be extended for a further 6 months to 31 December 2021.
The current enhanced payment rates, which have a maximum subsidy payment of €350 per week per employee, will be maintained for July, August, and September.
The review period for assessing eligibility will be extended from 6 months to 12 months which should ensure more firms can continue to claim the subsidy.
Rates are expected to reduce as the scheme comes to a close.
Read more about the changes to the EWSS here
Key action item: You need to ensure your business continues to qualify for the EWSS every month
2. COVID-19 Restrictions Support Scheme (CRSS) also extended
The CRSS will be extended beyond 30 June to the end of the year.
As businesses get back up and running there will be an enhanced restart payment of three weeks at double the rate of payment to meet the costs of re-opening as you exit the scheme.
The maximum subsidy amount per week will also be increased to €10,000 meaning eligible businesses could receive up to €30,000 from the restart payment.
Read more about the enhanced CRSS here
Key action item: As Government imposed restrictions ease across the country, knowing when to exit the scheme and apply for your restart payment is important.
3. Pandemic Unemployment Payment to be phased out
The PUP will close to new entrants from 01 July.
The rates of the PUP will start to reduce from September 2021.
From 07 September those on the highest rate, €350 per week, will be cut to €300; while those in receipt of €300 per week will drop to €250. The lowest rate, €250 per week, will come into line with the jobseekers’ allowance of €203.
A further €50 reduction is planned for 16 November followed by a final cut of the same amount on 08 February next year. Once the final cut is implemented it will mean the pandemic support will be reduced to same rate as the €203 per week jobseekers’ benefit.
Students returning to studies in September will also stop receiving the payment.
4. Tax Debt Warehousing to continue
The Tax Debt Warehousing Scheme has been extended to the end of 2021 for all eligible businesses meaning there will be an interest free period in 2022 and repayments of the warehoused debt commencing in January 2023.
5. Small Business Assistance Scheme for Covid-19 (SBASC)
The SBASC is a scheme that was introduced for businesses which were not eligible for CRSS or other sector specific supports e.g. Tourism Business Continuity Scheme
Eligibility for the SBASC for Q2 2021 applications has been broadened in two ways.
Where businesses have a minimum turnover of €50,000 they can benefit from a €4,000 grant. This now includes businesses in non-rated premises, thereby benefitting self-employed people working from home, who meet all other eligibility criteria.
It also provides for a grant of €1,000 for businesses with a minimum turnover of €20,000 and a maximum turnover of €49,999, with all other SBASC eligibility criteria applying.
6. Other highlights for SMEs:
- 9% VAT rate for tourism and hospitality to be extended to 01 September 2022
- Commercial rates holiday extended to 30 September, further extension to the end of the year to be reviewed as part of the Budget in October
- A new Business Resumption Support Scheme to be released in the autumn with grants of up to €15,000 available for businesses with turnover which is less than 75% of what it was in 2019
- New Support Schemes for the live entertainment and events industry
- Basic income guarantee pilot scheme for artists
- Low cost loans for retrofitting houses to make them more energy efficient
Date published 1 Jun 2021 | Last updated 2 May 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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