All the Latest news and updates on Budget 2013

So you have heard the leaks on the television and radio informing you that Budget 2013 will be the most severe Budget every imposed on the Irish People. 

We will keep you up to date with all the Latest news as and when it happens.

Finance Minister Michael Noonan has announced #Budget2013 #budget13

 Read the full Budget 2013 speech  here

#Budget2013 THE FACTS AND FIGURES

McCarthy Accountants will sort through the details and have the key points available to read at a glance. 

#Budget2013 contained tax raising measures amounting to c. one and a quarter billion euro and cuts in spending amounting to 2.2 billion.

Central to budget was the much flagged property tax. It will kick in next summer and will be charged at 0.18 percent of the value of your home. A so called mansion tax for houses valued at over a million euro will also be introduced at a rate of 0.25 percent.

Local authorities are to be given the power to vary the tax by 15 percent above or below the national rate to better match their funding needs.

But there’s bad news if you own more than one house. Next year you will have to pay the second home charge along with the new property tax. The second home charge will be phased out in 2014.

There are to be changes to PRSI contributions. The 127 euro weekly tax free allowance is to be scrapped with PRSI being paid on all income instead.

Landlords and people with shares will not escape either. PRSI is now to be charged on rental income and share earnings.

Pensioners are also in the firing line. Those with high incomes are to be hit with a 3 point increase in the Universal Social Charge on incomes over 60,000 euro.

Savers will see DIRT on interest go up to 33 percent from thirty, other capital taxes such as capital gains tax are also being increased

Motor tax is going up as is VRT however petrol and diesel have been spared any rise.

Some of the so called old reliable’s haven’t escaped either. Cigarettes are to increase by 10 cent per pack of 20, A pint of beer or cider will increase by 10 cent from Midnight but if your a wine drinker, a bottle is going up by one euro.

 

RECOVERY PLAN IS WORKING

Economy grew by 0.9% in 2012 and will grow by 1.5% in 2013

NTMA has raised over €7 billion in second half of 2012, Banks & Semi-States are back in the market, yields continue to fall and we are on target to emerge from EU/IMF programme in 2013.

Unemployment levels remain too high but latest figures show a fall on an annual basis for first time since 2005

General Government Deficit of 8.2% projected for 2012, well within our programme commitments for
a second year and Budget 2013 will deliver target of 7.5%

General Government Debt will peak in 2013

IMPLEMENTING OUR PLAN
Fair, equitable and designed to limit the impact on the most vulnerable and support job creation 

After Budget 2013, 85% of adjustment completed 

No increases to income tax credits, rates or bands

No change in basic weekly social welfare rates & frontline services prioritised in Education & Health

BROADENING THE TAX BASE
Motor tax and VRT will be increased with dual registration of 131 & 132 introduced 

Excise duty on alcohol increased for first time in a decade & also increased on tobacco

Local Property Tax (LPT) payable at a rate of 0.18% of the market value of properties (by reference to bands of €50,000) up to €1m and 0.25% on any balance above €1m Household charge will be abolished and LPT will be payable from the 1st of July for half year only

FAIRER TAXES
Tax relief on pension contributions limited to pensions of €60,000 or less from 2014 affecting
high earners in public and private sector Top Slicing Relief limited to non-statutory exgratia termination and severance payments of less than €200,000 CGT, CAT and DIRT increased to 33% Standard rates of USC (7%) applied to those
aged 70 years of age and over and all medical card holders earning €60,000 (twice the average industrial wage) and above.

SECURING THE PRSI SYSTEM
PRSI base broadened by increasing the annual minimum contribution for self-employed to €500 and removing the €127 weekly PRSI allowance For modified rate contributors income from a trade or profession will be subject to PRSI as will
their unearned income with effect from 1 January 2013 Unearned income including rental, investment, dividends and deposits income will be subject to PRSI for PAYE employees from 2014

SUPPORTING JOB CREATION AND ECONOMIC RECOVERY
A Ten Point Tax Plan introduced for SME’s, including farms, to enhance cash flow, to reduce administrative burden and to assist companies to grow and expand into new markets and products A Rebate on Diesel for licensed hauliers from 1
July 2013 to reduce transportation costs Support for the Tourism sector through the Gathering 2013 and 9% VAT maintained for 2013 

Local property tax (LPT) introduced as opposed to income tax increases, to minimize negative effect on jobs and the economy
LPT includes exemptions up to 2016 for new and previously unoccupied homes and also for first time buyers in 2013 to support emerging recovery
Five-year Capital Framework of €17 billion out to 2016 of which €3.5 billion allocated in 2013 and
capital programmes augmented by PPPs 

Access to 30% of AVCs to be allowed until 2016 and 0.6% Pension levy will be abolished in 2014

New SME Funding Supports being developed by NPRF

Launch of a new ten-year €175 million Venture Capital Fund, which will fund new and expanding Irish companies over the medium term

Additional €12 million in 2013 and €26 million in a full year to increase the numbers of placements
available on labour activation schemes

KEY EXPENDITURE MEASURES
Social Protection, Health and Education expenditure is 83% of total current spend.
Affecting these areas is unavoidable 

The headline social welfare payments, including pension payments are protected and frontline services will continue to be prioritised in Education & Health

SOCIAL PROTECTION
Duration of jobseeker’s benefit reduced by 3 months 

Child benefit will be reduced by €10 per month saving €142 million in a full year
Respite Care Grant reduced by €325 to €1375
Changes to Household Benefits Package saving €84 million in a full year

HEALTH
Reduction in cost of drugs and prescriptions
Increase in Drug Payment Scheme threshold and charges for medical card holders
Significant pay-related savings will be delivered

EDUCATION
Increase student contribution by €250 in 2013, 2014 and 2015
2 point increase in Pupil Teacher Ratio for fee charging and PLC schools only

REFORMING OUR PUBLIC SERVICES
Fundamental reform of public services is underway and a new process is commencing
under the Croke Park Agreement

REFORMING HOW WE PRACTICE POLITICS
Extension of the Ombudsman’s remit Work on the Protected Disclosures in the
Public Interest Bill continues

Reform of the Freedom of Information framework ongoing

Priority drafting of a Bill for Oireachtas inquiries is underway

POLITICAL ALLOWANCES REFORM
The expenditure limits of the Parliamentary Standard Allowance will be reduced by between 10% and 25% and the unvouched element will be abolished

Pre-paid envelope allocation to be halved

The Party Leader’s Allowance will be reduced by 10% and a Statement of Expenditure to the

Standards in Public Office Commission required for all members

Ministers’ severance payments will be abolished

 Budget 2013 as it happened……

15:42 Applying an across the board reduction of 10% to the Party Leaders Allowance

15:40 Proposal to abolish unvouched expenses element of the Parliamentary Standard Allowance – all Oireachtas members to use the vouched system

15:40 Within the Justice Sector, reduction in the Garda overtime and various other payroll and efficiency measured will yield over €60m 

15:39 Student contribution in higher education will be increased by €250 in each of the years 2013, 2014, 2015

15:38 The sick leave referral arrangement for teachers and SNAs will be made similar to those operating in the Civil Service 

15:37 Allocation to VECs to be reduced by €13m in 2013 

15:37 People 70+ with income of €600-€700 p/wk for single person and €1,200-€1,400 p/wk for couple – medical card replaced with a GP only card

15:37 Drug Payment Scheme threshold is being increased from€132 to €144 per month, saving €10m 

15:37 Prescription charge for medical card holders to be increased and monthly cap for a family is being increased from €10 to €19.50 

15:37 Prescription charge for medical card holders to be increased from €0.50 to €1.50 per item

15:37 Extra €150m being allocated to the health budget, which brings the total to €13.6bn

15:34 Child benefit rate to be reduced by €10 per month

15:33 Primary weekly rate of social welfare payment will not be reduced. Duration of Jobseeker’s Benefit to be reduced by three months to save €33m in 2013 and €82m in a full year 

15:29 €17.4m to be provided to Department of Children for development of youth detention facility at Oberstown

15:27 Preparation works for the Grangegorman DIT campus to get under way in 2013

15:25 €11m in 2013 and €26m in a full year given to increase number of placements available in ‘labour market activation schemes’

15:21 Enterprise Ireland allocated €139m to support indigenous Irish exporters in 2013

15:21 Further plans to reduce public service staff numbers to 282,500 by end 2014

15:13 Public service staff numbers will be reduced to around 287,000 in 2013, a reduction of some 33,000 from the 2008 peak of 320,000

15:13 Ireland has agreed a new Inter-Governmental Agreement with the US in relation to the US Foreign Account Tax Compliance Act

15:08 Govt to maintain the 12.5% Corporation Tax rate

15:06 Donations to charities and other approved bodies made from 2013 tax year will be subject to a new, simplified tax relief regime – New rate to be a blended rate of 31%

15:05 From 1 July 2013, Maternity Benefit will be treated as taxable income, but will continue to be exempt from the USC

15:05 Any Household Charge arrears which have not been paid by July 2013 will be increased to 200 and collected through Local Property Tax system

15:05 Voluntary deferral available for those whose income do not exceed €15,000 for single person, €25,000 for couple

15:04 Property tax payable on 0.18% market value of the property up to €1m. 0.25% on on balance of property value over €1m

15:04 Certain properties exempt from assessment. These exemptions largely correspond with Household Charge exemptions

15:03 Property tax to take effect from July 2013 for the second half of the year 

15:01 Government committed to maintaining the current rates of income tax together with bands and credits 

14:59 PRSI will be payable on income generated from wealth such as rental income, investment income, dividends and interest on deposits and savings

14:58 Where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI from 1 Jan 2013

14:56 PRSI – Increase to the minimum level of annual contribution from the self-employed from €253 to €500 and abolishing the weekly allowance for employees

14:56 ‘Top-slicing relief’ not available on ex-gratia lump sums and severance payments where non-statutory payments are over €200,000 

14:56 The reduced rate of USC for over 70s with an income over €60,000 will be discontinued in 2013 

14:56 Pension levy to be abolished in 2014

14:55 Tax relief will end for pension schemes providing over €60,000 a year from 2014

14:53 Michael Noonan says there is a need to broaden the income base for PRSI

14:52 AIB committed to contacting 1,500 customers a month in order to work with them to restructure their mortgages

14:47 Central Bank overseeing the rollout of a range of options to deal with unsustainable personal and commercial debt 

14:47 Real Estate Investment Trusts to be established to allow investors to finance investment in a ‘risk diversified manner’ 

14:46 Mortgage Interest Relief to end on 31 December 

14:46 VAT rate of 9% to be continued in 2013

14:46 Film Tax Relief Scheme extended to 2020, moved to tax credit model and to be enhanced 

14:46 Relief from capital gains tax arising on disposals of farm land for farm restricting purposes

14:45 Properties bought by first-time buyers in 2013 will be exempt from the new Local Property Tax up to the end of 2016

14:42 Exemption from the new Local Property Tax up to end of 2016 for any new or previously unoccupied homes bought in that period

14:41 SMEs-  Extending the Foreign Earnings Deduction for work related travel to certain countries beyond BRICS 

14:41 SMEs – Amending the R&D tax credit by doubling the initial spend eligible for the credit from €100,000 to €200,000 

14:41 SMEs- Increasing cash receipts basis threshold for VAT from €1m to €1.25m

14:40 SMEs – Reforming three-year corporation tax relief for start up companies to allow unused credits to be carried forward

14:39 Ten-point tax reform plan to help SMEs announced

 

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