The Key Points of Budget 2023 - What's in it for me?

27th September 2022


The Key Points from Budget 2023




Income Tax


  • The standard rate income tax band will be increased by €3,200 to €40,000 for single persons and to €49,000 for married couples with one earner; no other changes to income tax rates or bands.

  • The Personal, Employee (PAYE) and Earned Income (Self-Employed) Tax Credits will be increased by €75 to €1,775.

  • The Home Carer tax credit will be increased by €100 to €1,700.

  • A Rent tax credit of €500 will be introduced for those paying rent on their principal private residence & not in receipt of housing supports. This will be backdated to 2022.

  • The second band of the Universal Social Charge will be increased by €1,625 from €20,295 to €22,920.

  • Exemption from the top rate of the Universal Social Charge for all medical card holders & those over 70 earning less than €60.k is being retained.

  • The sea-going naval personnel tax credit will be extended to the end of 2023.

  • The Help to buy (HTB) scheme will be extended in its current form until December 2024.

  • Relief for the pre-letting expenses of landlords is enhanced with the amount a landlord can claim per property doubled to €10.000 and the length of time property must be vacant reduced to 6 months.

  • The Living City Initiative will be extended to the 31st December 2027 and there will be an acceleration of relief for owner occupiers so that it can be claimed as a deduction from total income of 15% of the total eligible expenditure in each of the first 6 years and 10% in year 7 and carry forward of relief for owner occupiers.

  • A Vacant Homes Tax at a rate equal to three times the property’s existing Local Property Tax rate will be introduced. This will apply to residential properties which are occupied for less than 30 days in a 12-month period.


Corporation Tax


  • The main Corporation Tax rate will be unchanged at 12.5% for companies with revenues less than €750m.

  • The Small Benefit Exemption will be increased from €500 to €1,000 and will permit two vouchers to be given to an employee in a single year. The Small Benefit Exemption allows an employer to give a non-cash benefit to its employees without payment of Tax/Prsi or USC. This additional benefit can provided this year if an employer wishes to do so.

  • The Knowledge Development Box for intellectual property will be extended to the end of 2028.

  • The Research & Development Tax Credit will be amended so it aligns to new international definitions.

  • The Corporation Tax Credit for Audio Visual Production will be extended to the end of 2028.

  • The Key Employee Engagement Programme (KEEP) will be extended to the end of 2025.

  • The Special Assignee Relief Programme (SARP) will be extended until the end of 2025 but the qualifying income will be increased to €100,000.

  • The Bank Levy will be extended for another year.

  • A Defective Concrete Products Levy of 10% will be introduced from the 3rd April 2023 and will apply to concrete blocks, pouring concrete and certain other concrete products.


Business Supports


  • A Temporary Business Energy Support Scheme (TBESS) for energy costs over the winter will be introduced for businesses that carry on a ‘Case 1 trade’ provided they are tax compliant and have experienced a significant increase in their electricity or natural gas costs. The scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021. If the increase is more than 50%, businesses will be eligible for support calculated on the basis of 40% of the amount of the increase in the bill amount, capped at €10,000 per trade.

  • There will also be Ukraine Enterprise Crisis Scheme for firms operating in the manufacturing and/or international traded services sectors introduced.


Vat


  • The 9% Vat rate applicable to the hospitality & tourism sector will continue until the end of February 2023 however it will not be extended and will return to 13½% from the 1st March 2023.

  • The reduced 9% Vat rate applicable to the Electricity & Gas will continue until the end of February 2023.

  • The Vat rate on newspapers & news periodicals (including digital editions) will be reduced to Zero from January 2023.

  • The Vat rate on life saving defibrillators will be reduced to Zero from January 2023.

  • The Vat rate on Hormone Replacement Therapy (HRT) & nicotine replacement products will be reduced to Zero.

  • No other changes to Vat rates.


Stamp Duty


  • The Residential Development Stamp Duty Refund Scheme will be extended to the end of 2025.


Capital Taxes


  • In relation to the Residential Zoned Land tax of 3% announced last year, maps are being prepared by local authorities and will be published on the 1st November next and any person will then have the opportunity to apply to their local authority to have the zoning status of their land amended. Further amendments will be introduced in the Finance Act 2022 to streamline the operation of the Residential Zoned Land Tax. The Residential Zoned Land Tax to be based on the market price of land will apply to serviced land zoned for residential development.



Excise Duties


  • The current Excise reductions (21 cent for petrol, 16 cent for diesel & 5.40 cent for Mineral Gas Oil) will be extended until February 2023.

  • The price of 20 cigarettes will increase by 50 cents, with pro rata increases on other tobacco products.

  • Carbon tax will be increased by €7.50 per tonne/CO2 on auto fuels from the 12th October and all other fuels from 1st May 2023. The NORA (National Oil Reserves Agency) Levy will be reduced to Zero so as to offset the carbon tax increase.

  • The cost of applying for a Special Exemption Order for late night venues will be reduced from €110 to €55.


Farming


  • There will be a time limited scheme of accelerated capital allowances for farmers for the construction of modern slurry storage facilities introduced so that 50% of the expenditure is claimed over two years. This is to assist with the adoption of environmentally positive farming practices.

  • The flat rate addition for farmers will reduce from 5.5% to 5% from 1st January 2023.

  • The Young Trained Farmer (Stamp Duty) Relief, the Farm Consolidation (Stamp Duty) Relief & the Farm Restructuring (Capital Gains Tax) Relief will be extended to end of 2025.

  • The Young Trained Farmer Stock Relief & the Registered Farm Partnerships Stock Reliefs will be extended to end of 2024.


Welfare


  • There will be a €12 increase in the state pension & other welfare recipients in 2023.

  • A Christmas Bonus of 100% will be paid to all social welfare recipients.

  • The working family payment thresholds will be increased by €40 per week.

  • The qualified child payment will be increased to €50 per week for Over 12’s and to €42 per week for Under 12’s.

  • The qualifying income threshold for the fuel allowance will increase from €120 to €200 above the relevant rate of the state pension contributory. For the Over 70’s, the weekly fuel allowance will increase to €500 for single person and €1,000 for couples.

  • The rate of the Domiciliary Care Allowance will increase by €20.50 to €330.50 per week and will be available to parents of babies who have to remain in hospital for 6 months.

  • The top-up payment to participants on the Community Employment, TUS & Rural Support Schemes will be increased by €5 to €25 per week.