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OVERVIEW BUDGET 2017

Continuing the trend over the last number of years, much of the budget details have already been leaked. And while the economy has performed relatively well this year, the room for manoeuvre was flagged as being limited.
Overall the budget favours spending increases over tax cuts by three to one. On the tax side of things, €500 million in cuts is offset by measures increasing tax revenue worth €195 million.

Reductions in universal social charge (USC) represent the main benefit for most people, with the key 5.5 per cent rate cut to 5% per cent.

What are the key points?

  • Tax rates & income bands remain unchanged
  • Tax credit for self-employed increased by €400 to €950
  • 0.5% cut in each of the 3 lowest USC bands
  • DIRT will reduce by 2% each year over the next 4 years (from 41% to 33%)
  • New Help to Buy incentive for first time buyers
  • Rented residential property interest relief increased from 75% to 80%
  • Mortgage interest relief extended to 2020
  • €1.2bn in funding for housing, with a goal to deliver 47,000 new social housing units by 2021
  • €5 per week increase in the state pension from March 2017
  • Capital Gains Tax further reduced to 10% for the sale of a business up to €1 million
  • €290 million earmarked to restore civil service pay cuts
  • Rent a room tax exemption increased by €2,000 to €14,000
  • 800 new Gardai to be recruited in 2017, and 2,400 new teaching posts announced
  • Inheritance tax reduced, especially from parents to children, where the threshold increases to €310,000
  • Tourism & Hospitality VAT rate of 9% unchanged
  • Cigarettes up 50 cents, alcohol & fuel duties unchanged
  • A new Sugar Tax by April 2018
  • Home Renovation Incentive further extended until 31 December 2018

We hope this information will be of benefit to you and your business. As always we are available should you have any further questions.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

BUDGET 2016: WHAT DOES IT MEAN FOR SME’S AND THE SELF-EMPLOYED?

It has been reported that SME’s now account for an enormous portion of all enterprise in Ireland. Unfortunately, SME’s and the self-employed rarely see their efforts being rewarded in any way when the time of the budget rolls around each year. Was the budget for 2016 any different? We have compiled some of the main changes that will affect both SME’s and the self-employed for your reference.

Self Employed Tax Credit               

 

It was announced in Budget 2016 that there would be a new earned income tax credit of €550 available for those who are self-employed, including farmers. Whilst this is still quite far behind the tax credits available to others, it is somewhat of a beginning for the process of not alienating the self-employed through taxation. It is suggested that this figure would be increased in future years.

Capital Gains Tax Reduction

 

There will also be a very welcome reduction in the Capital Gains Tax for 2016 for the self-employed and entrepreneurs. This reduction takes the tax from 33% to 20% on a gain up to €1 million, which could have significant positive consequences, despite still remaining quite far behind the UK and the North of Ireland in relation to this tax. The expenditure cap for Film Relief has also been increased to €70 million which is good news for this sector.

Farmers

 

Farming in particular was a sector which was more acknowledged in this budget than previous, as the general stock relief and the stamp duty exemption for young farmers was extended to 2018. It was also announced that a new succession transfer proposal would be put forward in order to increase certainty for the next generation of farmers and assist with a more long-term thinking that may not have been possible previously.

Microbreweries

 

Another sector of self-employment and SME’s that was newly acknowledged in Budget 2016 was the increasingly popular microbreweries. The excise relief for microbreweries will now be made available upfront. This is welcome news for the industry as it may help to free up some much needed cash flow which is always important for these SME’s.

In Conclusion

 

It is also hoped that the reintroduction of the Social Welfare Christmas Bonus of 75% will boost sales and income for SME’s, thus generating more revenue overall.

 

Unfortunately there have been few steps taken to support entrepreneurs in particular. Whilst these measures for the self-employed and SME’s in particular are small steps, at least these steps are finally being taken in the right direction and we would hope to see an end to the previous discrimination against these sector in future budgets, as SME’s begin to form the backbone of our modern economy.

KEY POINTS FROM BUDGET 2016

As the country watched with baited breath for what was promised to be a more forgiving budget than the previous efforts, there has been some questions over how much these changes may change things on a personal and professional level. We have compiled some of the key points to note from Budget 2016 for your convenience.

  • USC entry point raised to €13,000
  • USC reductions:

2015                            2016

1.5%                            1%

3.5%                            3%

7%                               5.5%

  • All USC bands lowered on earnings up to €70,044 per annum.
  • Minimum Wage to be raised from €8.65 to €9.15.
  • There will now be an additional €550 tax credit available to all owners of SME’s (Small and Medium Enterprises).
  • Normal tax bands will remain unchanged.
  • Child Benefit will increase by €5 per month, taking the total to €140 per child.
  • State Pension to increase by €3 per week for pensioners and carers aged 66years and over.
  • There is to be an increase in the Inheritance Tax Band relating to transfers from parents to children. The tax band will now stand at €280,000.
  • Social Welfare Christmas Bonus restored to 75%.
  • Cost of a packet of 20 cigarettes to increase by 50cent (including VAT).
  • Free GP care for children is to be extended to all under 12’s.
  • Fathers to be entitled to 2 weeks paid paternity leave as of September next year.

If you have any queries or concerns about how budget 2016 will affect your finances, please don’t hesitate to contact us at DCA Accountants.