The Budget is a contentious subject each years and a word which tends to eclipse all others in the weeks following its announcement. This comes as no surprise, as a country which has suffered enormous economic downturn in the recent past for there to be an enormous focus on an event such as the Budget which often gives a general idea of how heavy or light we can expect our wallets to feel in the coming year.
Budget 2018 was announced this week by Minister for Finance Paschal Donohoe. There were a great many predictions made in the week before the announcement but now that we have the facts to hand we will be breaking down the main points of the Budget and what it will mean for you and your business.
Positively, Ireland’s economic growth continues to rise, and Minister Donohoe has stated that he expects this to continue into 2018. This is welcome news for those who may not be seeing the economic recovery in their own pockets as yet, as there is a tentative promise that they may begin to do so in the coming months. Similarly, it was noted that unemployment figures are expected to continue to fall from the current 6.1% to 5.7% in 2018.
Here are the main points to note from Budget 2018:
- The entry point for the higher tax rate of 40% will rise from €33,800 to €34,550.
- The 5% USC rate will drop by 0.25%, whilst the 2.5% rate is set to drop by 0.5%.
- Stamp Duty on non-residential property being raised from 2% to 6%.
- The Government are allotting €1.8million towards housing for 2018.
- Mortgage Interest Relief for loans from 2004-2012 to be slowly phased out by 2020. Reducing to 70% in 2018, 50 in 2019 and 25 until the end of 2020.
- The help to buy scheme is to be retained.
- There will be a Brexit loan scheme of up to €300million made available to SMEs to assist with short term needs.
- No changes to VAT rates for tourism and services sectors.
- Social Welfare
- All payments to be increased by €5 at the end of March 2018.
- Social Welfare Christmas bonus to be paid at 85% of the usual rate. This is a €20 increase on last year.
- No changes to cost of petrol and diesel.
- Cost of 20 cigarettes to rise by 50cent.
- Sugar tax to be applied to sweetened drinks containing 8g of sugar per 100ml.
- Prescription charges to be reduced for all under 70s with medical card by 50cent per item.
- Threshold for Drugs Payment Scheme to fall from €144 to €134.
- Home Carer tax credit to be increased to €1200 per year.
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