Budget 2018

There were few surprises and some reward, although small, for those who ‘get up early to go to work’. While we may have hoped for more reward, social issues including housing, building a better health service, roads and schools remain a priority.

The economy continues to grow strongly and unemployment is now at its lowest level since 2008. The Minister proposes to establish a rainy-day fund starting with at least €1.5 billion and capital expenditure is set up double between 2015 and 2021 from €3.7 billion to €7.8 billion.

In preparing for Brexit, the Minister announced a €300 million loan scheme for SMEs and an additional load scheme of €25 million for the agri-food sector, to help with short term working capital.

Overall, the government is putting in place the infrastructure to sustain our economic growth and make Ireland an attractive location for inwards investment particularly those opportunities arising from Brexit.

Click here to Download Budget 2018 Summary PDF

INCOME TAX

There have been no changes to income tax rates. The 20% band is increasing by €750 per annum from €33,800 to €34,550

• Earned Income Credit

The minister is taking his time in narrowing the tax differential between the self-employed and those in the PAYE system by only increasing the Earned Income Tax Credit by €200 bringing it to €1,150.

• Home Carer Credit

The Home Carer Credit is increased by €100 to €1,200 per year.

UNIVERSAL SOCIAL CHARGE

The entry point for USC will remain at €13,000

• The 2.5% rate is reduced to 2%
• The 5% rate is reduced to 4.75%

The medium term plan is to amalgamate USC and PRSI into a single insurance payment.

CORPORATION TAX

The Minister has stated that Ireland’s 12.5% corporation tax rate on trading income will not be changed.

VAT

The 9% VAT rate for the tourism and services sector remains unchanged.

CAPITAL GAINS TAX

The 7-year period owners must retain qualifying assets to enjoy full relief from Capital Gains Tax is being reduced to 4 years.

CAPITAL ACQUISITIONS TAX

There were no changes to the rates or the tax-free thresholds.

STAMP DUTY

The level of stamp duty on commercial property transactions increases from 2% to 6% from midnight tonight; however, a stamp duty refund scheme is being introduced in relation to commercial land purchased for the development of housing (subject to conditions)

MEASURES TO SUPPORT BUSINESS

PREPARING FOR BREXIT

The Minister announced a Brexit loan Scheme of up to €300 million available at a competitive rate to SMEs to help with short term working capital needs.

A further loan scheme of €25 million will be developed for the agri-food sector.

KEY EMPLOYEE ENGAGEMENT PROGRAMME (KEEP)

To help companies to attract and retain key employees, the Minister announced KEEP, which will provide key employees with a financial incentive, via an advantageous tax treatment on share options, linked to the success of the company.

RESIDENTIAL PROPERTY & RENTAL MARKET

In order to encourage owners of vacant residential property to let the property for a minimum of four years, a new time-limited deduction for per-letting expenses is being introduced.

RENEWABLE ENERGY & ENERGY EFFICIENCY

Funds are being allocated to fund the rollout of the Renewable Heat Incentive and to incentivise the uptake of Electric Vehicles. In addition to the VRT relief (maximum €5,000) and the SEAI grant of up to €5,000, a 0% rate of Benefit-In-Kind is being introduced in 2018 for a period of 1 year.

OTHER DUTIES & LEVIES

VACANT SITE LEVY

The levy will increase from 3% in first year to 7% in the second and subsequent years.

CIGARETTES

An increase of 50 cent on a packet of cigarettes.

Contact Imelda Prendergast Director OSK for all your comments and queries in relation to Budget 2018.