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Budget 2011
7 December 2010
Personal Taxation
• PRSI
– Abolition of the PRSI ceiling of €75,036
– Class S (Self-Employed) PRSI rate increased from 3% to 4%
• Reduction of 10% in tax credits
• Average rate of total tax now on average industrial wage has increased from 25% to 26% when the 10% decrease in tax credits is taken into account.
Business Taxation
• Corporation tax exemption extended to new start-up companies in 2011 but now linked to level of employer’s PRSI paid. subject to a maximum of €5,000 per employee. If the amount of qualifying employers’ PRSI is lower than the reduction in corporation tax liability otherwise applicable, relief will be based on the lower amount.
Relevant Contracts Tax
• Replacement of 35% RCT rate with two rates on a revenue neutral basis
– 20% for those registered for tax with an established compliance record.
– 35% rate for subcontractors not registered for tax.
• Replacement of monthly repayment system with an offset system.
Indirect Taxes
• DIRT increased from 25% to 27% for payments made annually or more frequently and 30% for payments made less frequently than annually.
• Travel tax cut to €3
Property Transaction Tax from 7 December 2010 (midnight)
• No announcement made on property value tax
• 1% on all property transactions (i.e. transfers) up to €1m and 2% above €1m to replace old stamp duty regime.
• Stamp duty
– Abolition of reliefs – first time buyer relief, exemption for new houses under 125 sq m in size, relief on new houses over 125 sq m in size, consanguinity relief for residential property transfers, exemption for residential property transfers valued under €127,000, site to child relief
Carbon Tax
• No changes noted here but increase in excise on petrol and diesel noted below.
Capital Acquisitions Tax from 7 December 2010 (midnight)
• Tax free thresholds being reduced by 20%
Miscellaneous Provisions & Announcements
• Abolishment of reliefs from 1 January 2011 unless otherwise stated.
– Rent Relief to be phased out over 8 years; the same timeline as previously announced for Mortgage Interest Relief.
– Abolition of tax relief for Trade Union Subscriptions.
– Abolishment of Tax exemption from BIK for Employer Provided Childcare.
– Abolishment of Tax relief for new shares purchased by employees.
– Abolishment of PRSI relief on employee contributions to occupational pensions, employer PRSI relief reduced by 50%
• Restriction of reliefs from 1 January 2011
– Restriction of the tax-free element of ex-gratia termination payments to €200,000 so that payments above this amount will be subject to tax at the marginal rate.
– Ceiling of €40,000 on the tax exempt earnings of artists.
– Introduction of a charge to PRSI on approved profit-sharing schemes, approved save-as-you-earn schemes, unapproved share option schemes, and on share awards.
• Increase in excise duty
– 4c added to litre of petrol, 2c added to litre of diesel.
• Car scrappage scheme extended to 30 June 2011.
• Annual earnings limit to be reduced from €150,000 to €115,000 for 2011. The €115,000 limit will also apply to 2011 contributions where relief is sought against 2010 income.
• Public services bosses pay capped at €250,000 for new contracts including President of the State.
• Once-off (due to harsh weather) €40 extra allowance for those entitled to fuel allowance.
• Minimum wage down by €1 to €7.65
• The student service charge to be replaced with a new flat higher education contribution of €2,000. This will be for only one child in a family at any one time.
• BES Scheme to change to a new scheme and firms can now apply for €10m up from €2m
• All bookmakers taking bets from Ireland to pay 1% for online bets, to be same as those who have betting shops here.
Social Protection payments
• No change in state pension payments. However, decrease of 4% on working age pension with the 2011 new pension rate to be 117% of that paid in 1997.
• Child benefit decrease per month of €10 per child for first two children, and €20 for third child.
• Maternity Benefit down €8 per week
| Budget 2011 | Budget 2010 | ||
| Capital Gains Tax Rate | 25% | 25% | |
| Capital Acquisitions Tax Rate | Tax Free Allowance Reduced | 25% | 25% |
| Income Levy | |||
| €0 – €75,036 | See universal social charge | 2% | |
| €75,037 – €174,979 | See universal social charge | 4% | |
| €174,980+ | See universal social charge | 6% | |
| Income Tax Rates | |||
| Lower | 20% | 20% | |
| Higher | 41% | 41% | |
| DIRT Tax | |||
| 27%/30% – see above | 25% | ||
| Tax Credits | |||
| Single Person | €1,650 | €1,830 | |
| Married Couple | €3,300 | €3,660 | |
| PAYE Credit | €1,650 | €1,830 | |
| Rate Bands | |||
| Single/widowed | €32,800 | €36,400 | |
| Single/widowed with dependent children | €36,800 | €,40,400 | |
| Married -one income earner | €41,800 | €45,400 | |
| Married – two income earners | €65,600 | €72,800 | |
| PRSI | |||
| Contribution Ceiling | No limit | €75,036 | |
| Health Levy | |||
| Lower Rate | See universal social charge | 2.5% | |
| Higher Rate | See universal social charge | 5% | |
| Threshold | See universal social charge | €500 | |
| Universal Social Charge | |||
| < €4,004 | 0% | N/a | |
| € 0 – €10,036 | 2% | N/a | |
| €10,037 – €16,016 | 4% | N/a | |
| >€16,016 | 7% | N/a |
…
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.
Related Articles
National Recovery Plan 2011 – 2014
Finance Bill 2010
Budget 2010
Supplementary Budget 2009
Budget 2009
Budget 2011
7 December 2010
Personal Taxation
• PRSI
– Abolition of the PRSI ceiling of €75,036
– Class S (Self-Employed) PRSI rate increased from 3% to 4%
• Reduction of 10% in tax credits
• Average rate of total tax now on average industrial wage has increased from 25% to 26% when the 10% decrease in tax credits is taken into account.
Business Taxation
• Corporation tax exemption extended to new start-up companies in 2011 but now linked to level of employer’s PRSI paid. subject to a maximum of €5,000 per employee. If the amount of qualifying employers’ PRSI is lower than the reduction in corporation tax liability otherwise applicable, relief will be based on the lower amount.
Relevant Contracts Tax
• Replacement of 35% RCT rate with two rates on a revenue neutral basis
– 20% for those registered for tax with an established compliance record.
– 35% rate for subcontractors not registered for tax.
• Replacement of monthly repayment system with an offset system.
Indirect Taxes
• DIRT increased from 25% to 27% for payments made annually or more frequently and 30% for payments made less frequently than annually.
• Travel tax cut to €3
Property Transaction Tax from 7 December 2010 (midnight)
• No announcement made on property value tax
• 1% on all property transactions (i.e. transfers) up to €1m and 2% above €1m to replace old stamp duty regime.
• Stamp duty
– Abolition of reliefs – first time buyer relief, exemption for new houses under 125 sq m in size, relief on new houses over 125 sq m in size, consanguinity relief for residential property transfers, exemption for residential property transfers valued under €127,000, site to child relief
Carbon Tax
• No changes noted here but increase in excise on petrol and diesel noted below.
Capital Acquisitions Tax from 7 December 2010 (midnight)
• Tax free thresholds being reduced by 20%
Miscellaneous Provisions & Announcements
• Abolishment of reliefs from 1 January 2011 unless otherwise stated.
– Rent Relief to be phased out over 8 years; the same timeline as previously announced for Mortgage Interest Relief.
– Abolition of tax relief for Trade Union Subscriptions.
– Abolishment of Tax exemption from BIK for Employer Provided Childcare.
– Abolishment of Tax relief for new shares purchased by employees.
– Abolishment of PRSI relief on employee contributions to occupational pensions, employer PRSI relief reduced by 50%
• Restriction of reliefs from 1 January 2011
– Restriction of the tax-free element of ex-gratia termination payments to €200,000 so that payments above this amount will be subject to tax at the marginal rate.
– Ceiling of €40,000 on the tax exempt earnings of artists.
– Introduction of a charge to PRSI on approved profit-sharing schemes, approved save-as-you-earn schemes, unapproved share option schemes, and on share awards.
• Increase in excise duty
– 4c added to litre of petrol, 2c added to litre of diesel.
• Car scrappage scheme extended to 30 June 2011.
• Annual earnings limit to be reduced from €150,000 to €115,000 for 2011. The €115,000 limit will also apply to 2011 contributions where relief is sought against 2010 income.
• Public services bosses pay capped at €250,000 for new contracts including President of the State.
• Once-off (due to harsh weather) €40 extra allowance for those entitled to fuel allowance.
• Minimum wage down by €1 to €7.65
• The student service charge to be replaced with a new flat higher education contribution of €2,000. This will be for only one child in a family at any one time.
• BES Scheme to change to a new scheme and firms can now apply for €10m up from €2m
• All bookmakers taking bets from Ireland to pay 1% for online bets, to be same as those who have betting shops here.
Social Protection payments
• No change in state pension payments. However, decrease of 4% on working age pension with the 2011 new pension rate to be 117% of that paid in 1997.
• Child benefit decrease per month of €10 per child for first two children, and €20 for third child.
• Maternity Benefit down €8 per week
| Budget 2011 | Budget 2010 | ||
| Capital Gains Tax Rate | 25% | 25% | |
| Capital Acquisitions Tax Rate | Tax Free Allowance Reduced | 25% | 25% |
| Income Levy | |||
| €0 – €75,036 | See universal social charge | 2% | |
| €75,037 – €174,979 | See universal social charge | 4% | |
| €174,980+ | See universal social charge | 6% | |
| Income Tax Rates | |||
| Lower | 20% | 20% | |
| Higher | 41% | 41% | |
| DIRT Tax | |||
| 27%/30% – see above | 25% | ||
| Tax Credits | |||
| Single Person | €1,650 | €1,830 | |
| Married Couple | €3,300 | €3,660 | |
| PAYE Credit | €1,650 | €1,830 | |
| Rate Bands | |||
| Single/widowed | €32,800 | €36,400 | |
| Single/widowed with dependent children | €36,800 | €,40,400 | |
| Married -one income earner | €41,800 | €45,400 | |
| Married – two income earners | €65,600 | €72,800 | |
| PRSI | |||
| Contribution Ceiling | No limit | €75,036 | |
| Health Levy | |||
| Lower Rate | See universal social charge | 2.5% | |
| Higher Rate | See universal social charge | 5% | |
| Threshold | See universal social charge | €500 | |
| Universal Social Charge | |||
| < €4,004 | 0% | N/a | |
| € 0 – €10,036 | 2% | N/a | |
| €10,037 – €16,016 | 4% | N/a | |
| >€16,016 | 7% | N/a |
…
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.
Related Articles
National Recovery Plan 2011 – 2014
Finance Bill 2010
Budget 2010
Supplementary Budget 2009
Budget 2009
National Recovery Plan, 2011 – 2014
24 November 2010
Today the government published its National Recovery Four Year Plan, designed to bring the public finances back into order and attempt to support economic development. This is a blue print for the fiscal policies of the government along with economic areas and strategic policies to be adopted to drive the economy forward.
From a tax point of view, the following highlights should be noted:
Income Tax
• With a view to grossing an additional €1.9 billion in revenue, 65% of the overall adjustment will be delivered in 2011.
• Universal social service charge (the combining of the different levies and PRSI charges) first mentioned in Budget 2010 will be implemented in Budget 2011.
• Employer’s PRSI Exemption Scheme to be extended until the end of 2011.
• Pension contribution reform to include eliminating PRSI and Health Levy relief, reducing the personal contribution cap from €150,000 to €115,000 and phasing in of income tax relief on pension contributions limited to the standard rate from 2014.
Property Site Value Tax
• Interim fixed “household charge” of €100 per annum in 2012
• Full value-based addition to be introduced in 2013 (average charge estimated at €200 per annum).
Carbon Tax
• Price of Carbon to be doubled over four years from €15 to €30 per tonne.
Capital Taxes
• Structures and thresholds of capital gains tax and capital acquisitions tax to be reformed, taking account of the falling market values of assets and different types of asset categories.
VAT
• Standard rate of VAT to be 22% from 2013, and 23% from 2014.
Corporation Tax
• No change to the 12.5% rate.
As regards a strategy for improving competitive, growth and employment, the main talking point is the reduction in the minimum wage by €1 to €7.65.
Further details on all aspects of the government’s National Recovery Plan are available on the government website here.
Related Articles
Budget 2011
Finance Bill 2010
Budget 2010
Supplementary Budget 2009
Budget 2009
Finance Bill 2010
04/02/2010 The Minister for Finance today announced the details of the Finance Bill 2010, which gives effect to some of the measures announced in last December’s Budget. The bill will become law by 9th April 2010.
Some of the main measures enacted as detailed in our budget summary are as follows:
Carbon Tax: Non-transport fuels (i.e. heating fuels) will be levied from 1 May 2010. Non-oil fuels (coal/peat) subject to ministerial order.
Car Scrappage Scheme: No changes from budget. VRT exemption for electric vehicles until 31 December 2012.
Exemption from Corporation Tax for 3 years: Extended to companies which commence trading in 2010.
The minister also outlined some new measures in his speech which are included in the bill:
For further details on any of the above or on the more technical aspects of the bill please see the Revenue website. If you would like clarification on any issue, please do not hesitate to contact us.
Budget 2010
10/12/2009
Please find attached our budget summary in PDF format, which allows you to save to your desktop for ease of future reference. If you do not have a PDF reader it is free to download at www.adobe.com
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Supplementary Budget 2009
03/04/2009
The main changes as a result of the Supplementary Budget are as follows. The changes take effect from 1 May 2009 unless otherwise stated:
Income Levy
The income levy rates have doubled as follows, the thresholds have also been reduced:
- o €0 – €75,036 (2%)
- 0 €75,037 – €174,979 (4%)
- 0 €174,980 + (6%)
Income of less than €15,028 will be exempt from the levy – reduced from €18,304. This has the effect of bringing minimum wage workers within the tax net.
Amendment has been made to the public section pension levy to account for the increase in the income levy. The new thresholds are as follows:
- 0 < €15,000 exempt
- 0 €15,000 – €19,999 – 5%
- 0 €20,000 – €60,000 – 10%
- 0 €60,000 + – 10.5%
Health Levies
Health levy rates have doubled as follows:
- 0 Below Threshold (was €100,100, now €75,036): rates increased from 2% to 4%.
- 0 Above Threshold (>€75,036): rate increased from 2.5% to 5%.
PRSI Ceiling
PRSI ceiling has increased from €52,000 to €75,036.
Mortgage Interest Relief
No change for first time buyers with mortgages drawn within the last seven years. Relief has been abolished for all other mortgages, and first time buyer mortgages when end of year seven has been reached.
Deposit Interest Retention Tax
DIRT Tax has been increased from 23% to 25%. This is consistent with the increase in the income tax levy, as deposit interest is specifically exempt from the income levy.
Capital Gains Tax/Capital Acquisitions Tax
The rates for both CGT and CAT have been increased from 22% to 25% from midnight on 7 April 2009. Reduction in CAT group thresholds also applies from this date.
Excise Duties
- 0 The mineral oil tax on diesel will be increased by 5c (including VAT) from midnight of 7 April 2009
- 0 Excise duty on pack of 20 cigarettes will be increased by 25c (including VAT) from midnight on 7 April 2009
VAT Margin Scheme
A VAT magin scheme is being introduced for dealers in the motor trade. Precise details will be included in the Finance Bill.
Summary of Main Expenditure Measures
- 0 Removal of social welfare Christmas bonus
- 0 Education – reduction in funding to 3rd level institutions
- 0 Agriculture – reduction in the rate of payment for the REPs scheme
Miscellaneous Provisions
- 0 Early retirement scheme for the Public Service
- 0 Civil service career break/shorter working year
- 0 Re-skilling & Training Scheme
Budget 2009
14/10/2008
We have summarised the Budget 2009 as a reference point for you.
Income levy of 1% on all income earned up to €100,100, and 2% on all income thereafter. It appears to us that this will be calculated on your gross income, and that your tax credits will not be allowed to be used against this, we await the full details from the Finance Act to be finalised with the Government, before we have further details on this.
Petrol to increase by 8 cent from midnight 14 October 2008.
for cars greater than 2.5cc and CO2 classes E,F,G there is to be an increase in 2.5%
Petrol to increase by 8 cent from midnight 14 October 2008.
Cigs to be increased by 50 cent (pack size)
Changes to alcohol excise duties as well, decrease in low alcohol products
No change to corporation tax rate, this is to remain at 12.5%
Mandatory filing of returns to Revenue on-line, the Minister mentioned that there will be an extension of payment deadlines for those filing on line.
Stamp duty on ATM cards to be decreased to €5
Cheque duties to be increased to 50 cent per cheque
Stamp duty top rate is reduced from 9% to 6%
Capital Gains Tax up 2% and being brought forward in 2009.
Farming reliefs remain in place.
Farmers flat rate remaining at 5.2% for 2009
Carbon tax, will not be touched until next years budget.
Businesses with staff car parks in major urban areas €200.
Motor tax rate up 4% on cars below 2.5cc, and CO2 classes A to Dfor cars greater than 2.5cc and CO2 classes E,F,G there is to be an increase in 2.5%
Goods vehicles to be increased by 4-5%, these motor tax changes will take effect from 1 January 2009.
Tax bands are to increase by €1,000 for single, and €2,000 for married couples for 2009.
There is an increase in first time buyers interest relief from 20% to 25%.
Non first time buyers, the relief is reduced from 20% to 15%
They have introduced an air travel tax from Ireland at €10 and €2 for short flights within Ireland.
The VAT rate is up from 21% to 21.5% with effect from 1 December 2008.
DIRT is to be increase between 23% to 26%
€200 levy on holiday homes and 2nd houses.
Tax relief capped at standard rate for medical expense claims.