15 October 2013
Last Updated (bold type): 7 November 2013
Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.
• No change in tax rates so no major changes in net pay. However, changes in medical insurance relief and one-parent family credits will affect some individuals.
• One-Parent Family Tax Credit – replaced by Single Person Tax Credit from 1st January 2014. Of same value but now only available to one ‘principal carer’.
• Tax relief on private medical insurance limited to first €1,000 per adult subscription and €500 per child. Please note this threshold relates to the gross premium payable. Medical insurance is usually quoted net of tax relief at 20%. The portion of the gross premium above €1,000 will not qualify for tax relief. Where renewals have already been issued/paid a balancing statement will need to be issued by the insurer.
• Start your own business tax exemption available to long-term unemployed (at least 15 months). Income tax exemption of up to €40,000 per annum for the first two years.
• PRSI on all income of PAYE workers from 2014.
• No change in corporate tax rate.
• Lower rate of employer PRSI was due to revert to 8.5% in 2014. This was funded by the pension levy which has not been abolished (see stamp duty below). There has been no announcement on reverting to the 8.5% PRSI rate. The increase to 8.5% employer’s PRSI from 1st January 2014 was confirmed in the Social Welfare Bill.
• No change in the 9% VAT rate for the tourism industry.
• Increase in cash receipts threshold for VAT to €2 million from 1 May 2014.
• Farmer’s flat rate addition increased to 5% from 1 January 2014.
• VAT Anti-Fraud Measures introduced such as reversal of input credit on invoices which are not paid within six months of supply.
• No changes to note
Miscellaneous Provisions & Announcements
• Bereavement allowance of €850 has been abolished.
• Jobseekers allowance for those under 25 cut to €100, and new rate of €144 for those reaching age 25 in 2014.
• Free GP care for under 5s (i.e. GP only medical card).
• Air travel tax abolished (“reduced to zero”). This tax was introduced in 2011 and costed around €3 per flight.
• DIRT rate increased to 41% in 2014.
• No change in motor tax, no change in duty on petrol/motor diesel
• Prescription charge increased to €2.50 per item.
• Excise duty increases from midnight 15 October 2013: standard measure +10c, 75cl bottle of wine +50c, pack of 20 cigarettes +10c
• Telephone allowance to be abolished in 2014.
• Maternity and adoptive benefit to be standardised at €230 for new claimants in 2014.
• Illness benefit waiting period increased from 3 to 6 days.
• Home renovation incentive will allow taxpayers to claim relief at 13.5% on improvements to their principal private residence. This is designed to encourage the employment of tax compliant contractors. Spend bracket €5,000 – €30,000. Further details on this scheme is now available on the Revenue website here.
• Income threshold on over 70s medical cards has been reduced to €900 to week for a couple and €500 for a single person.
|Budget 2014||Budget 2013|
|Capital Gains Tax Rate||33%||33%|
|Capital Acquisitions Tax Rate||33%||33%|
|Income Tax Rates|
|41% (41% – where payments made less frequently than annually)||33% (36% – where payments made less frequently than annually)|
|Single/widowed with dependent children||€36,80||€36,800|
|Married -one income earner||€41,800||€41,800|
|Married – two income earners||€65,600||€65,600|
|Contribution Ceiling||No limit||No limit|
|Universal Social Charge|
|€ 0 – €10,036||2%||2%|
|€10,037 – €16,016||4%||4%|
|Self-employed > €100,000||10%||10%|
|Age >70/medical card holders with income < €60,000 – Max rate||4%||4%|
|Age >70, income > €100,000 – Max rate||7%||7%|
Whilst every care has been taken in the production of this budget summary, neither Royal Canal Financial Control Services nor Ronan Duffy and Co. can be held responsible for any action taken or deferred, resulting from any errors contained therein. For a more comprehensive summary please refer to the government press release.