Budget 2016

13 October 2015

Last Updated (bold type): 13 October 2015

Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.

Personal Taxation
• Increase in home carer tax credit to €1,000, with an increase in the income limit to €7,200.
• PRSI relief for income in excess of €352 weekly, up to weekly income of €424. Reducing sliding scale of relief as income increases above €352, with maximum relief of €12.

Business Taxation & Regulation
• Earned Income credit of €550 for self-employed traders and professionals, along with directors who are not entitled to the PAYE tax credit.
• From 1st January 2016, the statutory minimum wages will be €9.15 per hour
• Increase in the threshold for paying higher rate employer’s PRSI from €356.01 to €376.01.
• 3 Year Relief for Start-Up Companies is being extended
• Supporting retailers by incentivising electronic payments (see Stamp Duty below)
• Maximum rate of commercial motor tax reduced from €5,195 to €900

Relevant Contracts Tax and Construction Industry
• The Home Renovation Incentive (HRI) Scheme is being extended until 31 December 2016.

Indirect Taxes
• The 9% VAT rate has been retained.

Stamp duty
• With effect from 1st January 2016, the current €2.50/€5.00 per annum charge on ATM cards/combined ATM & Debit Cards is being replaced with a 12c ATM withdrawal fee, but capped at €2.50/€5.00 per annum per card

Carbon Tax
• No changes to note.

Capital Taxes
• Capital Acquisition Tax: Tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €225,000 to €280,000

(Local) Property Tax
• 2016 property revaluations postponed until 2019

Miscellaneous Provisions & Announcements
• Increased duty on a packet of 20 cigarettes 50 cent, with a pro-rata increase in all other tobacco products.
• Paternity benefit scheme to be introduced from September 2016
• €5 increase in child benefit
• Extension of free Pre-School Year from age 3 until aged 5.5 years/start primary school
• Extension of free GP care to children under 12 years
• €3 weekly increase in pension rates
• Respite care grant €1,700 in 2016
• Social welfare Christmas bonus increased to 75%
• Pension fund levy to end in 2015

Summary Statistics

		Budget 2016	Budget 2015
Capital Gains Tax Rate		33%	33%

Capital Acquisitions Tax Rate		33%	33%
Income Tax Rates
	Lower	20%	20%
	Higher	40%	40%
DIRT Tax
		41% (41% – where payments made less frequently than annually)	41% (41% – where payments made less frequently than annually)
Tax Credits
	Single Person	€1.650	€1,650
	Married Couple	€3,300	€3,300
	PAYE Credit	€1,650	€1,650
	Earned Income Tax Credit	€550	€0
Rate Bands
	Single/widowed	€33,800	€33,800
	Single/widowed with dependent children	€37,800	€37,800
	Married -one income earner	€42,800	€42,800
	Married – two income earners	€67,600	€67,600
PRSI
	Contribution Ceiling	No limit	No limit
Universal Social Charge
	< €13,000	Exempt
	< €12,012		Exempt
	€ 0 – €12,012	1%	1.5%
	€12,013 – €18,668	3%
	€12,013 – €17,576		3.5%
	€18,669 – €70,044	5.5%
	€17,577 – €70,044		7%
	€70,045 – €100,000	8%	8%
	Self employed income > €100,000	11%	11%
	PAYE income in excess of €100,000	8%	8%
	Age >70/medical card holders with income < €60,000 – Max rate	3%	3.5%

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.