Sep 27, 2022 | Cathal McCabe
This year’s Budget has been framed as a “Cost of Living” budget and is prepared against the background of high inflation and lower forecast economic growth and short-term uncertainty. All of this has resulted in a revised growth forecast of 1.25% in 2023.
A summary of the main measures which may impact on individuals directly is outlined below. This document intended as a summary of the key components of Budget 2023 that might impact you, your family and business.
 Personal Tax
- The standard rate band has been increased by €3,200 for all earners.
- The Personal / Employee and Earned income credit have been increased by €75.
- Small change to USC tiers to ensure lower paid workers do not pay higher rate USC.
- No headline changes to CGT/CAT rates or thresholds.
Income Tax Rates & Band’s
|Single person standard rate band||€36,800||€40,000|
|Married couple, one income standard rate band||€45,800||€49,000|
|Married couple, two incomes standard rate band||€73,600, transferable between spouses to a maximum of €45,800||€80,000, transferable between spouses to a maximum of €49,000|
USC Rates & Bands
|€22,921 – €70,044||4.5%|
- The self-employed 3% USC surcharge on non-PAYE incomes over €100,000 continues to apply for 2023.
- The reduced USC rate for medical card holders with income under €60,000 continues to apply for 2022.
Income Tax Credits
|Personal tax credit||€1,700||€1,775|
|Employee tax credit||€1,700||€1,775|
|Earned income credit||€1,700||€1,775|
- Extension of Help to Buy scheme for First Time Buyers until the end of 2024.
- A zoned land tax will be phased in over the coming years. The tax will apply at a rate of 3% equal to the value of the land.
- New rent tax credit of €500 for private tenants. The credit can be claimed for 2022.
- Pre letting expenditure of up to €10,000 can be claimed by landlords subject to criteria.
- Vacant homes tax will come into effect in 2023 and the levy will be 3 times the Local Property Tax levy.
- A defective concrete levy of 10% on certain concrete products will come into effect in 2023.
- Temporary Business Energy Support Scheme- will result in a refund of 40% of the increased cost in electricity bills subject to qualifying criteria.
- Companies will also be allowed to give employees €1,000 tax free a year in vouchers – which is up from current limit of €500.
- No changes announced to pensions tax relief or thresholds.
- No changes announced to DIRT rates.
- VAT rate on newspapers reduced to 0%.
- VAT rate for the hospitality industry will be restored to the 13.5% rate in March 2023.
- Flat rate for farmers reduced from 5.5% to 5%.
- Electricity energy credit of €600 to be paid to households in three instalments of €200 over the coming months.
- Additional lump sum fuel allowance of €400 to be paid to fuel allowance recipients.
- 9% VAT rate for electricity and gas bills extended until February 2023.
 Social Welfare Measures
- Once off double week “Cost of Living Support” payment to all social welfare recipients which will be made in October. This payment is in addition to the Christmas bonus.
- Double child benefit payment to all qualifying households in November.
- Once off lump sum payment of €200 to those in receipt of the Living Alone Allowance.
- State Pension will increase by €12 a week.
 Child Care Measures
- Reduction of €175 per month or €2,106 in the cost of child care.
Please note that this is a general summary and no action should be taken without taking detailed advice.
|Telephone:||01 491 4132|
|Office:||192-194 Harold’s Cross, Dublin D6W AP86|