All the Latest news and updates on Budget 2016
Finance Minister Michael Noonan has announced #Budget2016 #Budget16
Read the summary of Budget 2016 here
#Budget2016 THE FACTS AND FIGURES
McCarthy Accountants have sorted through the details please see the key points below
Mr Noonan announced
The top USC rate will drop from 7pc to 5.5pc for income earned in excess of €18,668 and up to €70,044.
The 3.5pc rate will be reduced to 3pc for income earned between €12,012 to €18,688.
And the bottom rate of 1.5pc will drop to 1pc for the first €12,012 of income earned.
The USC cuts will mean the marginal rate of tax will be 49.5pc for all people earning under €70,444.
Meanwhile, the entry point for USC will increase from €12,012 to €13,000 which will result in 42,500 being removed from USC entirely.
From next year, 700,000 low income workers will now pay no USC.
The exemption from USC for those on medical cards or those over 70 earning less than €60,000 will remain in place.
“The changes I introduced in Budget 2015 resulted in every worker in Ireland receiving increases in their pay this year; for many, the first increase in years. It also supported job creation across the economy,” Mr Noonan said
“Focusing the majority of the available resources for tax reductions on low and middle income families was the right thing to do last year. By reducing the marginal rate for people earning less than €70,000, workers kept more money in their pocket,” he added.
The Budget will leave low income earners better off to the tune of two weeks’ wages, and higher earners will be better off to the tune of one week’s wages.
Home Carer Tax credit/PRSI/Property Tax
Finance Minister Michael Noonan has increased the Home Carer Tax Credit of €190 to bring it up to €1,000 a year, in a bid to support single-income families.
This increase in the credit is to help families who care for an elderly or disabled relative.
The income threshold up to which the carer can earn has also been increased by €2,120.
So, a one income family with two children earning €35,000 will see their take home pay increase by €57 a month.
After this Budget, the top 1pc of income earners will pay 22pc of all taxes collected while the bottom 75pc of workers will pay 19pc of the country’s tax revenues.
Mr Noonan also has introduced a tapered PRSI credit with a maximum level of €12 per week or €624 a year in a bid to help low income earners.
In relation to Employer PRSI, Mr Noonan has increased the entry point to the top rate of 10.75pc by €20 per week to €376 a week.
Mr Noonan confirmed he has increased the tax free threshold for Capital Acquisition Tax from €225,000 to €280,000 to allow greater transfers between parents and children.
Mr Noonan has also confirmed he is freezing the current Local Property Tax rates until 2019, as recommended by the Don Thornhill report.
He said he is also exempting properties affected by Pyrite from the Local Property Tax.
Mr Noonan has also confirmed he is to phase out the much-hated pension levy, saying it has “done its job” and is no longer needed to fund the lower 9pc VAT rate in the tourism sector.
He is extending the Bank Levy which was only due to run until 2016 until 2021 to bring in an additional €750m over that period or €150 a year.
Small business owners and VAT in tourism
Michael Noonan has confirmed the introduction of a €550 tax credit for small business owners in his Budget speech.
The Earned Income Tax Credit will be available to all small business owners including farmers, retailers, publicans and tradesmen.
“I see this measure as a first step and further steps will be taken in future budgets, as resources permit,” Mr Noonan said.
Mr Noonan also announced that Capital Gains Tax relief will be reduced to 20pc for disposal of business assets with an overall limit of €1m from the first of January 2016.
“The relief will represent a simplified and upfront benefit for individuals who propose to sell their business,” he said.
The three year tax relief for certain start-up companies will also remain in place.
“The relief has been identified by entrepreneurs as an important support,” Mr Noonan said.
The 9pc vat rate for the tourism sector will also remain in place.
For the Agri-Food sector, Mr Noonan said he will extend a number of schemes.
They inlcuded the general stock relief, the stock relief for young trained farmers, the stock relief for registered farm partnerships and the stamp duty exemption for young trained farmers for a further three years to the end of 2018.
He also announced a succession transfer proposal to provided certainty about the transfer of family farms to the next generation of farmers.
The proposal will allow two people from the same family enter into a profit sharing partnership which provides for the transfer of the farm to the younger family member.
“To support this transfer, an income tax credit worth up to €5,000 per annum for five years will be allocated to the partnership and split according to the profit-sharing agreement,” he said.
A tax relief for micro breweries introduced last year will now be available up front and it is hoped it will reduced cash flow burden of the current rebate scheme.
Noonan on New homes
Finance Minister Michael Noonan has said there has been a “market failure” in the provision of new homes across the country, particularly in Dublin.
To address the crisis, he told the Dail in his Budget speech that Nama is aiming to deliver 20,000 additional residential units before the end of 2020.
He said 90 pc of these units will be in the greater Dublin area.
About 75 pc of these will be houses, mainly starter homes.
He said this commitment will require funding of the order of €4.5bn, which will all be recovered, and will support 30,000 house building and ancillary jobs.
He also said that having received clearance from Europe, he is increasing the level of the Employment and Investment incentive is being doubled.
This will allow a company raise up to €5m a year up to a limit of €15m, up from €10m.
Concluding his speech, Mr Noonan said this Budget is about giving certainty to the Irish people.
“No booms, no busts,” he said. “It will provide stability to families across the country. It will reward work, enterprise and innovation. It will give certainty to the Irish people of a better future. But more than anything else , it will keep the recovery going.”
It will cost 12c every time you use an ATM
Michael Noonan plans to introduce 12c charge for every ATM transaction.
Mr Noonan is abolishing the €5 stamp duty for a owning a debit card and replacing it with a 12c fee for every time you withdraw cash from an ATM.
However, there will be no charges for debit card transactions in shops or elsewhere.
“No consumer will be lose out as a result of this change as the stamp duty will be capped at the existing levels of €2.50 or €5 depending on card type,” Mr Noonan said.
Mr Noonan will also reduce fees for accepting credit and debit card payments by retailers.
And contactless credit and debit card limits will be increased from €15 to €30.
“Together with the reduction in bank fees, retailers should now bring an end to practices such as requiring a minimum payment for card use,” Mr Noonan said.
The price of a packet of cigarettes to jump by 50c
Michael Noonan also announced a reduction in commercial motor tax to €900 down from €5,195.
Mr Noonan is also increasing the film tax credit cap up to €70m to encourage more investment in the sector.
The cost of a pack of 20 cigarettes will be increased by 50c and now cost €10.50.
Budget 2016 is “No booms, no busts, it will provide stability to families across the country. It will reward work, enterprise and innovation. It will give certainty to the Irish people of a better future. But more than anything else , it will keep the recovery going.” Minister Noonan, Budget 2016 Speech – 13th October 2015.