At time of writing (mid-November),Minister Donohoe has delivered his second Budget speech and the 2018 Finance Bill has just passed Committee Stage. A very brief outline of changes to date (under summary headings) is:

 

PERSONAL/EMPLOYEE TAXES

  • An increase of €750 in the 20% band means that, in 2019, a single person will start to pay the 40% rate on income above €35,300 (or €44,300 for single income couples).
  • The USC entry point of €13,000 is not changed but the ceiling at which the 2% rate applies increases from €19,372 to €19,874 and the 4.75% rate falls to 4.5%; no change for income levels over €70,044.
  • The home carer credit is increased again (to €1,500; from €1,200).
  • The 0% BIK rate for electric vehicles has been extended to 31 December 2021 for vehicles with an original market value (OMV) of €50,000 or less. No sign yet of the promised report on the review of company car BIK rules announced last year.
  • The earned income credit for 2019 will increase by €200 to €1,350. While at least going in the right direction, it is still €300 short of the PAYE credit and Minister Noonan did indicate three years ago he expected they would be aligned by now. (And still no change to the 3% USC surcharge for nonemployment income over €100,000 that means an effective USC rate of 11% on such income!)
  • There are some minor changes to tax exemptions for Hepatitis C payments, certain Defence Forces member benefits, certain childcare payments and Magdalen Laundry payments.
  • Minister Donohoe announced he intends to introduce a ceiling of €1 million on eligible income for those claiming the special assignee relief programme (“SARP”); it is a victim of its own success as the cost to the Exchequer tripled (from €6 million to €18 million) between 2014 and 2016.
  • The Group A CAT threshold increases from €310,000 to €320,000.
  • For public sector workers, from 1 January 2019, wave goodbye to the pension related deduction (“PRD”) and say hello to the additional superannuation contribution (“ASC”).

 

BUSINESS TAXES
Also announced were some minor changes to the new employee share option incentive scheme (“Key Employee Engagement Programme – KEEP”) designed to enhance the scheme targeted at the SME sector to help SMEs attract/retain talent by deferring taxation of gains on employee shares until sold.

To (clearly audible, even in Leinster House) sighs of relief, the administration of the EII scheme is moving to a self-certification model aimed at addressing the current (let’s call it as it is, appalling) delays in processing applications. Similar measures are introduced for the SURE (it won’t let you down!) scheme. The changes cover nearly fifty pages of legislation. Both are extended to 2021.

In 2018, employer PRSI increased from 10.75% to 10.85% and will increase again in 2019 (to 10.95%), with a further increase (to 11.05%) planned for 2020. The corporation tax exemption for certain startup companies was due to expire this year but has been extended for a further three years to 2021.

A new accelerated capital allowances scheme for gaspropelled vehicles and refuelling equipment is being introduced to encourage uptake of gaspropelled commercial vehicles as an alternative to diesel.

 

PROPERTY SECTOR
This year’s “jumbo breakfast roll” offers are:

  • A full restoration of interest relief for mortgages on private rental accommodation was announced; it had been restricted, and was not due to be restored until 2021
  • Antiavoidance changes to rentaroom relief (e.g. a minimum continuous rental period of 29 days) are designed to put beyond doubt that the relief does not apply to shortterm tourist accommodation (e.g. provided via internet booking sites). There are exclusions for certain types of use such as respite care or language students.

 

AGRI SECTOR
Unusually, a quiet Budget/Finance Bill for the farming community (so far…) in that there are no new measures just three year extensions to 2021 of stock relief and the young trained farmer stamp duty exemption; but, no doubt, Brexit changes may feature before too long.

 

OTHER
Unless you have been offgrid, you’ll know PAYE modernisation (or PMOD, as hipster Revenue heads call it) is looming large; nothing further to add as, on PMOD, you’ll have heard it all before!

For VAT, on 1 January next he giveth (the rate on electronically supplied publications falls to 9% from 23%) and he taketh away (the “tourism” rate reverts to 13.5% from 9% apart from newspapers and sports facilities)

Excise duty increases this year affect fags (a pack of twenty is now at least €11), betting duty (it doubled; what odds would you have got on that!) and diesel passenger cars (a 1% VRT surcharge) but not booze (I’ll drink to that); since last year, the SSDT (sugar sweetened drinks tax) is also in force.

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