Budget 2023

Sep 27, 2022 | Cathal McCabe

Executive Summary

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.

Taxation Measures

[1] 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

20222023
Standard Rate20%20%
Higher Rate40%40%
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

USC Band’sRate
€0- €12,0120.5%
€12,013- €22,9202%
€22,921 – €70,0444.5%
€70,0458%
  • 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

20222023
Personal tax credit€1,700€1,775
Employee tax credit€1,700€1,775
Earned income credit€1,700€1,775


[2] Housing

  • 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.


[3] Business & Entrepreneur’s

  • 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.

[4] Pension’s/Investments

  • No changes announced to pensions tax relief or thresholds.
  • No changes announced to DIRT rates.

[5] VAT

  • 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%.

Cost of Living Measures

[1] Energy Assistance

  • 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.

[2] 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.

[2] Child Care Measures

  • Reduction of €175 per month or €2,106 in the cost of child care.

Advice

Please note that this is a general summary and no action should be taken without taking detailed advice.

Telephone:01 491 4132
E-mail:cathal@opeswealthtrust.ie
frank@opeswealthtrust.ie
diarmuid@opeswealthtrust.ie
Website:www.opeswealthtrust.ie
Office:192-194 Harold’s Cross, Dublin D6W AP86

Cathal McCabe