Budget 2017 Moving Towards a Sustainable Future‌
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Overview
Summary Main Points
This is the first Budget of the new government which required the support from the opposition benches. The budget as a whole offers a little for everyone with no particular group overly benefiting.
The Main Discussion points in the budget were as follows:
Overall the minister stated the ratio of 3:1 between spending increases of €1m and tax cuts of €300m.
• First Time Buyers - Help to Buy Scheme
Housing features prominently with increased public spending, extension of HRI scheme, Rent -a- Room Relief and landlord interest deduction all to be welcomed.
• Universal Social Charge rate reductions by 0.5%
• Earned Income (Self Employed) Tax Credit increased by €400 to €950 • Home Carer tax credit increased by €100
Tax cuts were focused on further reduction in the Universal Social Charge and incentives to support housing sector.
• Increase in Old Age Pension and Social Welfare Payments by €5 (€2.70 for under 25’s)
Exporters will be disappointed as they continue to suffer from weak sterling rate and Brexit imminent.
• Duty on Cigarettes increased by 50c per packet (20)
• Increase in Minimum Wage to €9.25 (up €0.10)
• New Childcare scheme proposed from next September • Sugar Tax Proposed
John Canty & Co. Chartered Accountants and Registered Auditors 3 Denny Street, Tralee, Co. Kerry. www.jcantyaccountants.ie
Pensioners
Personal Taxation
• Increase Old Age Pension by €5
• Revised Universal Social Charge Rates
• €20 cap on Prescription charges for over 70’s
• 0.5% on income up to €12,012
(from 1st March 2017)
• 2.5% between €12,013 and €18,772
• Christmas bonus increased to 85%
• 5% between €18,773 to €70,044 • Home Carers Tax Credit increased by €100 to €1,100 • DIRT rate reduced from 41% to 39%
Business
• Earned Income Tax Credit increased to €950 • Increase in Minimum Wage to €9.25(up €0.10)
Families • Childcare Scheme from September 2017(means tested) • Medical Card extended to all children on domiciliary care allowance
• Start your own business extended to 2018
Landlords • Rent-a-Room Relief increased to €14,000 • Home Renovation Incentive Scheme(HRI)
Farming
extended to 31st December 2018
• Tax Credit €950(same as self-employed) • Low Cost Loan Fund for Farmers for up to €150,000 at 2.95% interest rate • Farm Restructuring relief from CGT has been extended to the end of 2019 • Income Averaging to allow pay tax only due in poor year and deferred tax liability over subsequent years. • VAT refund increased to 5.4% from 5.2% from
• Interest Relief deduction for Landlord increased by 5% to 80%
Housing • Mortgage Interest relief extended to December 2020. • Help to Buy Scheme on new homes for first time buyers in form of income tax rebate (max €20,000)
1st January 2017
John Canty & Co. Chartered Accountants and Registered Auditors 3 Denny Street, Tralee, Co. Kerry. www.jcantyaccountants.ie
Business Reaction
Other Taxes Corporation Tax
“The lessons learned over this
• No change in 12.5% tax rate
period must not be forgotten. We
Capital Gains Tax
must budget prudently while we
• Business disposal have reduced CGT rate of 10% for
prioritise the repair of our public
disposal of businesses or part thereof (limit €1M)
services after a period of underinvestment.” Michael Noonan Finance Minister
Inheritance Tax “There is something for everyone in this Budget but the business
• Increase Tax Free Threshold Group A: (Parents to child) €310,000
community would have liked to see more measures to assist them as
Group B: (Relatives)
€32,500
we enter an era of post-Brexit uncertainty,”
Group C: (Non Relatives)
€16,250
Ian Talbot, Chambers Ireland
VAT
“…. significant step towards solving the housing crisis“
• Retention of 9% VAT Rate for hospitality sector
Construction Industry Federation(CIF)
Miscellaneous
“Budget 2017 was so well flagged before it was announced that there
• Duty on Cigarette increase by 50c per packet (20)
could be few surprises. It had a little bit of everything in little bits…“
• No change to alcohol, petrol or diesel
Chartered Accountants Ireland
John Canty & Co. Chartered Accountants and Registered Auditors 3 Denny Street, Tralee, Co. Kerry. www.jcantyaccountants.ie