The Key Points from Budget 2020
Income Tax
There will be no changes to income tax rates or bands.
The Home Carers’ Tax Credit will be increased by €100 to €1,600.
The Earned Income Tax Credit for Self Employed will be increased by €150 to €1,500.
The reduced rate of the Universal Social Charge for medical card holders will be extended for a further year.
The Help to buy (HTB) will be extended in its present form for a further 2 years.
The Living City Initiative will be extended in its present form for a further 3 years.
There will be a change to the Employment and Investment Relief (EII) in that the full income tax relief will now be allowed in the year of investment. The annual investment limit will be increased to €250,000 and a new annual investment limit of €500,000 will be introduced for investors who are prepared to invest in the EII for 10 years or more.
The Foreign Earnings Deduction and the Special Assignee Relief Programme (SARP) will both be extended in their present form until December 2022.
The Key Employment Engagement Programme (KEEP) will be amended to apply to company group structures and to allow for greater flexibility for employees to move within such structures. The scheme will also be adjusted to allow for part time and family friendly working arrangements for KEEP employees.
The Farm Restructuring Relief Programme will be extended in its current form until the end of 2022.
Corporation Tax
The main Corporation Tax rate will be unchanged at 12.5%.
The rate of Dividend Withholding Tax (DWT) will increase from 20% to 25% from the 1st of January 2020.
It is proposed that a modified Dividend Withholding Tax regime will be introduced from 1st January 2021 when it is intended that the Revenue will apply a personalised rate of dividend withholding tax to each individual taxpayer based on the rate of tax that they pay on their PAYE income.
The R&D tax credit will be increased from 25% to 30% for micro and small companies. There will be a new provision to allow small micro companies to claim the credit before they commence trade limited to offset against Vat and Payroll tax liabilities only.
There will be targeted amendments or anti avoidance measures to Irish Real Estate Funds (IREF’s) with the intention that appropriate tax will be paid by IREF’s.
The bank levy is changing to ensure the yield remains at €150 million.
Vat
There are no changes to Vat rates.
Stamp Duty
The rate of stamp duty applicable to non-residential property will increase from 6% to 7.5% from midnight tonight.
A charge to stamp duty at a rate of 1% will apply from midnight where a scheme of arrangement in accordance with part 9 of the Companies Act 2014 is used for the acquisition of a company.
Capital Taxes
The lifetime Group A threshold for Capital Acquisitions Tax (which applies to transfers from a Parent to a Child) will be increased from €320,000 to €335,000 from today.
There will be no changes at this time to the Capital Gains Tax (CGT) entrepreneurial relief.
Excise Duties
The price of 20 cigarettes will increase by 50 cents, with pro rata increases on other tobacco products, from midnight tonight.
It is intended to increase carbon tax from €20 to €80 per tonne by 2030. There will be a €6 increase on auto fuels applying from midnight tonight, increases to other fuels will not apply until after the winter fuel season (May 2020).
The 1% diesel surcharge introduced last year will be replaced with a nitrogen oxide (NOx) emissions-based charge. This will apply to all passenger cars registered for the first time from the 1st of January next. The charge will apply on a €1 per kilometre basis with the rate increasing in line with NOx emitted.
There will be additional relief through the diesel rebate scheme to hauliers to compensate for the increased cost of fuel.
An additional €3 million will be provided towards electric vehicle infrastructure. It is intended to double the number of Local Authority charging ports, support a scheme to install communal charging ports at apartment blocks and facilitate the roll out of fast charging points to taxi ranks at transport hubs around the country.
The benefit in kind zero rate for electric vehicles will be extended to 2022.
The VRT relief for hybrid vehicles will be extended to 2020.
There will be a relief introduced from betting duty and betting intermediary duty up to a limit of €50,000 per calendar year – will apply to single undertakings only.
Other
The Christmas Bonus paid to all social welfare recipients will be 100% in 2019.
Prescription charges for all persons will be reduced by 50 cent.
The threshold for the Drug Payment Scheme will be reduced by €10 per month.
The Medical Card income thresholds for people over 70 will be increased by €50 for a single person or €150 euro for a couple per week.
Free GP care will be extended to include children under 8 and free dental care for children under 6.
There will be 1,000,000 additional care hours provided in 2020.
The Abhaile scheme for those in mortgage arrears will be extended.
An additional €80 million will be provided for the Housing Assistance Payment (HAP) scheme.
The fuel allowance will increase by €2 per week.
The living alone allowance will increase by €5 per week.
There will be a €15 increase in the one parent family payment and jobseeker transition income and a €10 euro increase in the working family payment income threshold for families with up to three children.
Electricity tax rates for business and non-business will be equalised.
Brexit
There will be a package of 1.2 billion to respond to a disorderly Brexit. This package will be as follows:
€200 million expenditure towards staffing and technology to be allocated amongst a number of departments to manage no deal;
€650 million to support the agricultural, enterprise and tourism sectors exposed to an disorderly Brexit and to assist the most affected citizens/regions. This support will be by way of grants, loans and/or equity;
The balance will be determined closer to the time.
We hope you find this information useful and please feel free to share it. If you have any questions, feel free to contact us.
Timothy Kelliher & Company Limited
Chartered Accountants
Phone: +353 (0) 64 6632105
Email: info@timothykelliher.ie
Web: www.timothykelliher.ie