Below is a brief summary of the provisions announced in yesterday’s budget.
- Temporary Business Energy Support Scheme: Applies to tax compliant trading businesses who have experienced a 50% increase in energy costs when comparing a 2022 billing period against the same period in 2021.The support will be 40% of the increase to a maximum of €10k per month.
- Research and Development Tax Credit: Companies can now choose to have the first €25k of any claim refunded in year 1 – 3 years previously – or have the tax credit offset against other tax liabilities.
- Knowledge Development Box: The 6.25% corporation tax rate extended to 31 December 2027.
- Film Tax Credit: Extended to 31 December 2028.
- Small Benefit Exemption: The tax free voucher scheme is increased from 2022 from €500 tax free per employee to €1,000. 2 vouchers can be given in any one year.
- KEEP Scheme: Extended to 31 December 2025.
- Foreign Earnings Deduction: Extended to 31 December 2025.
- Special Assignee Relief Programme: Extended for 3 years to 31 December 2025 and limit for claiming has increased to €100k.
There were significant changes to the income tax bands and tax credits.
- Income Tax Band – Increase of the 20% tax band by €3,200 (from €36,800 to €40,000 for a single person) with similar increases for couples.
- Tax Credits – The general tax credits will increase from €1,700 to €1,775. These credits are:
- Personal Tax Credit
- Employee Tax Credit
- Earned Income Tax Credit
- Home Carer Credit: Increase by €100.
- USC: An additional €1,625 will be subject to the 0.5% rate as opposed to the 2% rate to take minimum wage workers out of the higher USC rate.
- Rent Tax Credit – Renters will be entitled to a rental credit of €500 per year for 2022 onwards. This will be paid on a per person basis and so couples will avail of a €1,000 tax credit.
COST OF LIVING ALLOWANCES ONCE OFF
- Energy Payments (households): €600 per household paid in 3 instalments of €200 each directly to energy providers. The first payment will paid before Christmas and two further instalments in 2023.
- Double Social Welfare: Double week cost of living payment in October for those in receipt of social welfare.
- Double Child Benefit: Double child benefit payment in November.
- Vacant Property Tax – A new tax will apply to residential property which is occupied for less than 30 days in a 12 month period. The tax is expected to be 3 times that of LPT.
- Help to buy Scheme – Extended until 31 December 2024 – this scheme is an incentive where first time buyers can claim a maximum of 10% of the value of the property or €30,000, whichever is lower.
- Pre-Letting Expense Relief – This relief allows a landlord claim a tax deduction for pre letting expenses of up to €10,000 (previously €5,000) per unit where the premises has been vacant for at least 6 months (previously 12 months) before letting.
- Residential Development – Stamp Duty Refund: Extended to 31 December 2025 – this scheme allows for a limited refund of stamp duty paid on non-residential property when converted into residential property.
- Living City Initiative: Extended to 31 December 2027 and can now be claimed over 7 years – previously 10.
- Hospitality Sector (9% Rate) – The reduced rate will cease on 1 March 2023.
- Oil & Gas (9% Rate): Extended to 28 February 2023.
- Newspapers: Reduction in the VAT rate for print media including digital editions to 0% from 1 January 2023.
- Farmers Flat Rate Scheme – Decrease from 5.5% to 5%.
- Cigarettes – Increased by 50 cents.
- Alcohol – No change.
- Old Age Pension: To increase by €12 per week.
- Welfare Payments: To increase by €12 per week.
- Child Care Fees: To reduce childcare costs by up to 25%.
- College Fees: A once off reduction of €1,000 per college student for 2022/2023 year with a further €500 reduction for families earning under €100k.