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

USC Rates & Bands

• 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

[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.