Budget 2021 For Tradesmen & Trade Pros Explained

Budget 2021 analysis to help you understand the changes, opportunities and any potential issues.

Irish Government’s 2021 Budget has been revealed and the 17.75bn euro pack is described as the ‘biggest in the history of the state' – primarily aimed to deliver on its Programme for Government, deal with COVID as well as Brexit pressures.

So what does the Budget 2021 mean for Tradesmen and Trade Professionals?

We explain what the 2021 budget means for tradesmen and self-employed trade pros, helping you to understand what the changes mean, opportunities and any potential issues.

Following is a summary of the main points:

Personal Tax

No increase to income tax or USC rates.
The ceiling for the second USC rate adjusted up to €20,687. The weekly threshold for higher rate of employers PRSI will go from €394 to €398.
Earned Income Tax Credit increased and now equal to PAYE tax credit, therefore self-employed income tax credit to rise by €150 to €1,650.
Self-employed workers can delay 2019 tax and 2020 preliminary tax for a year without interest or penalties
If you receive PUP, you can earn up to €480 per month from casual work and keep your full payment.

Verdict: Good news re income tax, but if you are an employer – zero incentives to employ more staff!

Motoring Tax

Rates of motor tax will remain unchanged for those pre- 2008 vehicles, but from 1 January next year, there will be an increase for more pollutant vehicles based on new emissions tests.
If you’re thinking of buying a new van – new Vehicle Registration Tax changes will make vehicles with higher CO2 emissions more expensive after January 2021.
You’ll also see carbon taxes hitting your next fill-up at the pumps, with an extra €1.30 added to the cost of a 60-litre tank of petrol and €1.51 to the same amount of diesel.

Verdict: Budget 2021 is tough on motoring but it will mean cleaner and more efficient vehicles will be taxed less.

Other Taxes

The temporary 21% VAT rate will expire on February 28th 2021 - returning to the original 23% rate.
Pack of 20 cigarettes increase by 50c, raising the price to €14 and pro-rata increase for other tobacco products, but e-cigarettes remain untouched.
Carbon tax is increasing from €26 per tonne of CO2 to €33.50 per tonne - but the hike will not be applied to home heating oil until May of next year.

Verdict: Cost of living going up! But at least there is no change to the price of alcohol. 😁

Employment & Education

The Apprenticeship Incentivisation Scheme, which offers €3000 incentive payment for each new apprentice you register since March 2020, due to finish at the end of this year, has been extended.

Apprenticeship employers are eligible for a €3,000 payment for each new apprentice they take on. €2,000 per apprentice is payable at the point of registration. A further €1,000 is payable for each eligible apprentice retained on their apprenticeship.

The Big Picture

With a significant rise in household saving accounts during the pandemic (extra €7 billion as estimated by CSO data ) – the government’s goal is to now encourage people to spend to help restore the economy.

Funding for both residential and community retrofit programmes has been significantly increased by €100m (raised through carbon taxes) which is an 82% increase compared to last year.

With a massive scale-up in retrofit activity, we expect to see announcements on further incentives to get people to spend on domestic retrofitting and energy efficiency improvements including topping up existing grants for heat pumps, solar panels, and insulation.

The Help-to-Buy scheme has been renewed – allowing buyers to claim back up to €30k in tax from construction costs. Plus the introduction of the “Affordable Housing" scheme (details yet to be outlined - but a shared equity arrangement between the state and the borrower is likely) will be another driving force of new home construction.

Verdict: Demand for new builds and home improvement jobs is only likely to increase – great news for the trade pros across Ireland.