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Budget 2018

10 October 2017

Last Updated: 10 October 2017

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

Personal Taxation
• Home carer credit increased from €1,100 to €1,200

• Benefit in Kind (BIK) on Electric Vehicles to be set to 0% for a period of 1 year, along with 0% BIK on electricity used in the workplace for charging vehicles.

• Pre-letting expenses incurred of up to €5,000 allowed as revenue expense for tax relief against rental income for properties vacant for 12 months or more.

•Plan to amalgamate USC and PRSI over the medium term

• REMINDER: The government had previously announced an increase in the minimum wage to €9.55 per hour from January 2018

Business Taxation & Regulation
• Earned Income Credit increased from €950 to €1,150

Relevant Contracts Tax and Construction Industry
• No changes noted

Indirect Taxes
• VAT refund scheme for Charities, to compensate for VAT incurred on inputs. Scheme to refund expenses incurred in 2018 in the next tax year

• Tourism rate of 9% to be retained

Stamp duty
• Rate of duty on non-residential property increased from 2% to 6%

Carbon Tax
• No changes noted

Capital Taxes
• Qualifying assets under the ‘7 year CGT relief’ scheme can now be sold between the fourth and seventh anniversaries of acquisition and still enjoy full CGT relief on any chargeable gains.

(Local) Property Tax
• No changes noted

Miscellaneous Provisions & Announcements
• Excise duty on cigarettes increased by 50c

•Sugar tax to be introduced on 1 April 2018

• Tapered residential mortgage interest relief (‘tax relief at source’) for home owners who took out qualifying mortgages between 2004 – 2012 over 3 years (2018: 75% of 2017 relief, 2018: 50% relief, 2019: 25% relief)

•Enhanced Revenue budget for PAYE Compliance interventions, in preparation for the PAYE Modernisation from 1 January 2019

• Brexit loan scheme to assist SMEs

Summary Statistics

Budget 2018 Budget 2017
Capital Gains Tax Rate 33% 33%
Capital Acquisitions Tax Rate 33% 33%
Income Tax Rates
Lower 20% 20%
Higher 40% 40%
DIRT Tax
39% (39% – where payments made less frequently than annually) 39% (39% – 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 €1,150 €950
Rate Bands
Single/widowed €34,550 €33,800
Single/widowed with dependent children €38,550 TBC €37,800
Married -one income earner €43,550 €42,800
Married – two income earners €69,100 €67,600
PRSI
Contribution Ceiling No limit No limit
Universal Social Charge
< €13,000 Exempt Exempt
€ 0 – €12,012 0.5% [No change] 0.5%
€12,013 – €18,772 2.5%
€12,013 – €19,372 2.0%
€18,773 – €70,044 5%
€19,373 – €70,044 4.75%
€70,045 – €100,000 8% [No change] 8%
Self employed income > €100,000 11% [No change] 11%
PAYE income in excess of €100,000 8% 8%
Age >70/medical card holders with income < €60,000 – Max rate 2.0% 2.5%

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.

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