BUDGET UPDATE 2017
USC bands and rates
Incomes of €13,000 or less are exempt
- €0 to €12,012 @ 0.5%
- €12,013 to €18,772 @ 2.5%
- €18,773 to €70,044 @ 5%
- €70,045 to €100,000 @ 8%
- PAYE income in excess of €100,000 @ 8%
- Self-employed income in excess of €100,000 @ 11%
Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will now pay a maximum USC rate of 2.5%.
Tax credits:
Home carer tax credit – an increase in the home carer tax credit from €1,000 to €1,100
Earned income credit – increase in earned income credit of €450
Incentives:
Home Renovation Incentive (HRI) extended until 31 December 2018;
Interest Relief
Rented Residential Property The deduction available for qualifying interest payments is being increased from 75% to 80%. This measure will apply to both new and existing mortgages.
Help to Buy
An income tax rebate incentive is being introduced.It will consist of a rebate of income tax paid over the previous four years up to 5% of the purchase price of up to €400,000.
Where new homes are valued between €400,000 and €600,000 the maximum relief (i.e. €20,000) will continue to be available.
The house must be a new build and applicants must take out a mortgage of at least 80% of the purchase price. This scheme will run until the end of 2019.
Rent a Room
The ceiling for exemption from income tax for income received from the letting of a room or rooms in a principal private residence is being increased from €12,000 to €14,000 for 2017 and subsequent years.
HRI;
Home Renovation Incentive (HRI) extended until 31 December 2018; and
Living City Initiative
The Living City Initiative is being amended to encourage an increase in the take-up of the scheme. This involves extending the availability of the scheme to landlords, while for residential applicants it removes the restriction on the maximum floor size of the property, removes the requirement that the property must have been previously used as a dwelling, and reduces the minimum amount of expenditure needed to qualify
Business Tax
Foreign Earnings Deduction
FED is being extended until the end of 2020 and qualifying countries are being extended to include Colombia and Pakistan. The minimum number of days for travel is being reduced to 30 per annum.
Special Assignee Relief Programme
SARP is being extended for a further 3 years until the end of 2020.
Start Your Own Business Relief
The Start Your Own Business tax relief is being extended for 2 years until the end of 2018.
New SME focused share based remuneration scheme to be introduced in Budget 2018, subject to further consultation and EU state aid approval.
Fishers Tax Credit
A new tax credit is being announced for fishers to assist the viability of the fishing sector. Fishers who have fished for wild fish or wild shellfish for at least 80 days in a tax year can claim an income tax credit of €1,270 per annum
Agri Measures
Flat-Rate Addition
Increase in the Farmer’s Flat-Rate Addition from 5.2% to 5.4%
Energy efficient equipment
The scheme of accelerated capital allowances for energy efficient equipment is being made available to sole traders and non-corporates.
Income Averaging Step Out
The Income Averaging regime allows a farmer’s taxable profit to be averaged out over a 5-year period. This is being amended to allow an “opt out” in a single year of unexpectedly poor income, availed of for the 2016 tax year.
Low Cost Loans
The availability of EU-backed low-cost loans will see farmers able to avail of loans at less than 3pc. It is understood that €150m will be available to farmers and the loans will be operated through the banks.
VAT – no change in any of the existing VAT rates, including the 9% rate for tourism sector.
Excise –
Excise duty on 20 cigarettes is being increased by 50c (including VAT) with effect from midnight 11 October, with pro rata increases for other tobacco products.
A tax on sugar sweetened drinks (“sugar-tax”) to be introduced in April 2018 (following a consultation process).
micro-breweries – micro-breweries qualify for a special relief from alcohol products tax where output does not exceed 40,000 hectolitres (previously 30,000)per annum. As a cash flow measure, this relief will be available upfront as well as by means of a rebate;
DIRT
Reduced rate of Deposit Interest Retention Tax (DIRT): by 2% each year for the next 4 years until it reaches 33%.
Capital Acquisitions Tax
Changes to tax-free thresholds:
- The Group A lifetime tax-free threshold applying to gifts and inheritances from parents to children is being raised from €280,000 to €310,000,
- The Group B lifetime tax-free threshold applying to gifts and inheritances made to parents, siblings, nieces, nephews or grandchildren is being raised from €30,150 to €32,500.
- The Group C lifetime tax-free threshold applying to gifts and inheritances made to all others (except spouses and civil partners who are exempt) is being raised from €15,075 to €16,250
Capital Gains Tax –
Entrepreneurs’ relief – from 1 January 2016, a CGT rate of 10% (rather than the standard rate of 33%) shall apply to the net chargeable gain arising on the disposal by individuals of assets comprising the whole or a discrete part of a trade or business. This shall be subject to a lifetime limit of €10m.
State pension & other SW payments
A €5 increase per week for pensioners and carers aged 66 and over, effective March 17
€5 increase in all weekly social welfare payments in line with State pension
Christmas Bonus;
Rise to 85%
Jobseekers;
Aged between 18-24 increase of €2.70/week from €100
€25 cap on prescription charges for over 70s reduced to €20 from 1 March
Single Affordable Childcare Scheme
From September 2017 – means-tested subsidies, based on parental income, for children between six months and 15 years and universal subsidies for all children aged six months to three years
Medical Card
Medical card for all children who receive domiciliary care allowance
Teacher and Garda Recruitment
2,400 new additional teaching posts, including 900 new resource teachers.
Funding to recruit and train an additional 800 gardaí. With more civilian staff hired to free up desk bound jobs.
Tackling offshore tax evasion
A comprehensive programme of targeted compliance interventions against those engaged in offshore tax evasion.
This programme will be underpinned by applying advanced analytics techniques to the range of new data sources available and supported by new legislation designed to encourage early disclosures of liabilities in relation to offshore accounts or assets by
- Denying the opportunity to make a qualifying disclosure in this area after 1/5/2017 and
- Introducing a new strict liability offence for failure to return details of offshore accounts or other assets.
Increase resource to confront non-compliance
Increasing Revenue staff resources by 50 (full time equivalent) on audit and investigation activities as well as enhancing ICT systems capacity for data matching and data analytics will lead to a direct increase in tax and duty yield from compliance interventions.
