Budget 2017

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