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BUDGET 2016

in Blog

Welcome to Budget 2016. We will report through the afternoon as the reports come through on exactly what this budget means...


Who are the winners and who are the losers?

Stay with us as we crunch the numbers.


Budget2016

 So we are ready to go. Minister Howlin, unsurprisingly, in the red of Labour (tie wise), while the Finance Minister has gone for a grey/silver option.


Currently Sympathy being expressed following the tragadies in Carrickmines, and the murder of the Garda this weekend. 

May those who lost their lives rest in peace.


So we have begun

Michael Noonan is setting the scene. Ireland will be the fastest growing economy in Europe for the second year in a row.

1.97 Million to be in employment by end of 2015. 86,000 new jobs for 2016.

Unemployment to be down to 8% by end of 2016 from current 9.4%

Growth rate of 4.3%

50c on a packet of Cigarettes from midnight tonight. This will raise 61.4 Million in 2016.

€750 million revenue relieving provisions but no tax increase other than excise on cigs. 

USC threshold to increase to €13,000 

Rates of USC reduced as follows:

1.5% rate reduced to 1% - Applies on income up to 12,012

3.5% rate is reduced to 3% - Applies on income between €12,002 - €18,668

7% rate is reduced to 5.5% - Applies income between €18,668 - 70,044

Top rate of USC exemption for Medical Card Holders and over 70s retained 



Home Carer Tax Credit increased to €1000

Marginal Threshold up to €70,000 reduced to 49.5%

It was expected some 700,000 income-earners would be outside the USC net altogether

Self employed worker earning €40,000 will see a saving of €1,002 which is an increse of 3.5%

The tweaks to the tax brackets will mean a single-income family on €35,000 will take home an extra €57 a month, while those working full-time on minimum wage will have an extra €708 per year.

The inheritance tax threshold will also be raised from €225,000 to €280,000.


No change to VAT rates. 9% rate to continue.

Bank Levy extended to 2021

Self Employed Tax Credit of €550 PA for those who do NOT benefit from PAYE Tax credit.

Nama will build 20,000 units by the end of 2020. 90% of these will be in the Dublin area, and 75% of them will be starter homes.


Minimum wage increase from €8.65 to €9.15 from Jan 1st 2016

Commercial Motor tax to be simplified from the current 20 bands to a more straight forward 5 bands.

Free childcare from age 3 to age 5 and a half, or until they start school. This is to include ALL children with special needs.

Child benefit up to €140 per child.

Statutory Paternal leave for fathers of 2 weeks from next September.

Respite grant reinstated

Fuel Allowance increased to €22.50 per week for social welfare recipients

Family Income Suppliment increased by €5 for first child and €10 for second and subsequent children.

Old age pension up by €3 per week

Free GP care up to 12 years of Age

8,000 new places in community childcare

Funding for thereputic treatments 

€3 million for the development of after school services

€5 debit card charge scrapped to be replaced with a transaction charge of 12c per transaction up to a cap

Transaction limit on contactless card transactions increased to €30

Home Renovation Incentive extended to December 2016.


So the main points in brief

USC

  • The 1.5% rate of USC will be reduced to 1.0%
  • The 3.5% rate of USC will be reduced to 3.0%
  • The 7% rate of USC will be reduced to 5.5%
  • The entry point to the USC will rise from €12,012 to €13,000
  • It’s expected that some 700,000 earners will be outside the USC net completely

Minister Noonan says that these measures will equate to an increase in yearly income of one week’s wages.

Income Tax

  • Inheritance tax threshold increases to €280,000 from €225,000
  • Introduction of ‘tapered PRSI credit’ with a maximum level of €12 per week to alleviated the ‘step effect’ across a range of incomes
  • Capital gains tax for self-employed and entrepreneurs drops to 20% from 33%

Pensions

  • Pension fund levy has done its job apparently and is no longer needed. The 0.15% levy as it currently stands will no longer apply from January 2016

Motor Tax

  • Commercial tax rates on vehicles are to be made less complex – the range of brackets will reduce from 20 to five, ranging from €92 to €900

Cigarettes and Alcohol

  • The cost of a pack of 20 will increase by 50c to €10.50.

    It’ll raise €61.4 million for the exchequer in 2016, and is the only tax increase in the budget
  • Excise duty on alcohol will remain unchanged

Tourism

  • 9% VAT rate for tourism sector to remain unchanged

Film

  • Cap on eligible expenditure increased to €70 million

The home carer’s tax credit is to be increased by €190 to €1,000 bringing it back in line with pre-2011 levels.

The revaluation date for Local Property Tax (LPT) is to be moved from 2016 to 2019, suggesting that rising house prices will not hit homeowners in 2017 with greatly increased LPT.




Watch for the breakdown on how it affects you coming soon.




© Ruairi Devlin 2015