Budget 2014
Summary
Tax Credits, Reliefs and Rates for the Tax Years 2013 and 2014
The following is a summary of Budget 2014 and is not intended to be a comprehensive guide. Just click on the section in the table below for more details.
Section |
Observations at a Glance |
|
1 | Tax Rates / Credits | Changes for One parent family |
2 | PRSI rates | No changes |
3 | Personal Tax | DIRT / Exit tax increase to 41% |
4 | Business Tax | Retention of 9% VAT rate. Increase in VAT Cash Receipts Threshold to €2 million (from May 2014) |
5 | Capital Taxes | CGT incentive for new entrepreneurs |
6 | Property Taxes | Home Renovation Scheme introduced |
7 | Indirect Taxes | Increases in Alcohol and Tobacco |
8 | Pensions | Increase in Pension Levy for 2014, will reduce in 2015 |
9 | Social Welfare | Reduced rate for Jobseekers Allowance age 25 and under |
1. Rates / Credits
Personal Tax Credits |
2013 |
2014 |
Single Persons |
1,650 |
No change |
Married / Civil Partnership |
3,300 |
No change |
Additional one-parent family |
1,650 |
Only payable to principal carer |
PAYE |
1,650 |
No change |
Age credit -Single |
245 |
No change |
Age credit-Married |
490 |
No change |
Home carer |
810 |
No change |
Dependant relative tax credit |
70 |
No change |
Rent Relief: | ||
Under age 55 single persons |
200 |
No change |
Under age 55 married / civil partnership |
400 |
No change |
Over age 55 single persons |
400 |
No change |
Over age 55 married / civil partnership |
800 |
No change |
Service charges |
N/A |
No change |
Incapacitated child |
3,300 |
No change |
Blind persons: | ||
Single |
1650 |
No change |
Married / civil partnership (both blind) |
3,300 |
No change |
Widowed additional credit |
540 |
No change |
Widowed person bereaved in year assessment |
3,300 |
No change |
Widowed parent: | ||
1st year after year of bereavement |
3,600 |
No change |
2nd year after year of bereavement |
3,150 |
No change |
3rd year after year of bereavement |
2,700 |
No change |
4th year after year of bereavement |
2,250 |
No change |
5th year after year of bereavement |
1,800 |
No change |
Exemptions limits 65- years and over |
|
|
Single / widowed/surviving civil partner |
18,000 |
No change |
Married / civil partnership |
36,000 |
No change |
Standard Rate Bands | ||
Single / widowed/surviving civil partner |
32,800 |
No change |
Married couples, one income |
41,800 |
No change |
Married couples, two incomes |
65,600 |
No change |
One parent / widowed parent |
36,800 |
No change |
Tax rates |
|
|
Standard rate |
20% |
No change |
Top rate |
41% |
No change |
2. PRSI Rates
2013 |
2014 |
|
Employee ceiling |
No limit |
No change |
Employee PRSI exemption |
No exemption |
No change |
Employee PRSI rate |
4% |
No change |
Employer PRSI (higher rate) |
10.75% |
No change |
Employer PRSI (lower rate) |
4.25% |
No change |
Self employed ceiling |
No limit |
No change |
Self employed minimum contribution |
€500 |
No change |
Self employed PRSI rate |
4% |
No change |
Universal Social Charge (USC) | ||
Exemption limit |
10,036 |
No change |
0-10,036 |
2% |
No change |
10,037 – 16,016 |
4% |
No change |
> 16,016 |
7% |
No change |
Self employed income >100,000 |
10% |
No change |
Aged 70 and over/medical card holders>60K |
7%/10% |
No change |
3. Personal Tax
Medical Insurance: From 16 Oct 2013, tax relief in respect of medical insurance premiums (VHI etc) will be capped at €1,000/adult & €500/child.
Top Slicing Relief: To be abolished from 01 January 2014 on ALL ex-gratia lump sum payments.
Employment and Investment Incentive (EIIS): …will be removed from the high earners relief restriction for a period of 3 years. This will apply to share subscriptions made on or after 16 Oct 2013 and on or before 31 December 2016.
Film Relief /Tax Relief Scheme Brought forward from 2016 to 2015 “eligible” individual to include Non EU talent in order to attract additional film productions to Ireland (subject to EU approval) and will be coupled with a withholding tax regime.
DIRT (Deposit Interest Retention Tax): A flat rate of 41% will apply to DIRT and exit tax that apply to life assurance policies and investment funds.
Magdelane Launderies: Lump sum payment to survivors will be tax exempt.
Single Parent: One parent family tax credit (currently paid to both parents) to be replaced by a new single person child carer tax credit (payable to the principal carer only). No change in value of tax credit.
Interest on Loans in partnerships: Tax relief for interest on a loan to acquire an interest in a partnership will no longer be available from today. Current loan interest to be phased out over 4 years.
New business start ups by unemployed: A new 2 year income tax exemption for trading income up to €40,000/annum for individuals who set up a qualifying unincorporated business where they have been unemployed for up to 15 months.
4. Business Tax
Value Added Tax (VAT): A number of new measures to combat VAT fraud: including repayment of VAT on unpaid suppliers (invoices) after 6 month period.
Corporation tax: Standard rate of 12.5% remains unchanged.
Tourism and Hospitality: Retention of 9% VAT rate.
VAT Cash Receipts basis: Threshold to be increased from €1.25 million to €2 million from 01 May 2014.
R&D tax credit: Key recommendations of R&D Tax Credit review to be implemented. The improvement relates to outsourcing, ‘base year’ and key employee provisions.
Aviation Sector: The air travel tax will be reduced to 0% from 01 Jan 2014.
5. Capital Taxes
Capital Gains Tax (CGT): New measures for entrepreneurs who reinvest proceeds from disposal of assets on which CGT has previously been paid. Tax Credit will be equal to the lower of the CGT paid or 50% of the CGT due on future disposal of the new investment. Subject to EU state aid approval.
6. Property Taxes
Immigrant Investor Program: To be extended to include investments in real estate trusts in Ireland. Subject to certain conditions.
Regeneration Program: To be extended to Cork, Galway, Kilkenny and Dublin.
Home Renovation Scheme:
- Tax Relief of 13.5% on qualifying expenditure on home renovations and improvement work on homes (in 2014 and 2015)
- Applies to expenditure between €5,000 to €30,000
- Relief will be granted over 2 year period following the year that the work is carried out
Share Transfers: New exemption from Stamp Duty for transfers of shares traded on the ESM of Irish stock exchange.
7. Indirect Taxes
Value Added Tax (VAT): A number of new measures to combat VAT fraud: including repayment of VAT on unpaid suppliers (invoices) within 6 month period.
Alcohol: Increase of 10c on a pint of beer and cider and a standard measure of spirits from midnight. Increase of 50c on a 75cl bottle of wine.
Tobacco: Increase of 10c on a packet of 20 cigarettes from midnight, with a pro rata increase on other tobacco products.
Auto Diesel, Petrol and Home Heating oil: No increases.
8. Pensions
Tax relief for pension contributions: Remains at marginal tax rate.
Pension Levy: Increased from 0.6% to 0.75% for 2014. Levy will be reduced to 0.15% for 2015.
Pension funds: Value capped at €2 million (from €2.3 milllion).
Basic welfare payments / child benefit: No changes.
Telephone allowance: To be discontinued from Jan 2014.
Jobseekers Allowance: Reduced rate to people age 25 and under:
- Age 18-24: €100 unless they are an existing claimant on a higher rate, in which there will be no change
- Age 25 no children: to receive €144 / week unless they are an existing claimant on a higher rate, in which there will be no change
- The above allowance will increase to €188 from age 26
- Age 18-24 who participate in back to education allowance scheme will recieve €160 / week
Maternity / Adoptive Benefit:
- To be standardised at €230 / week for new claimants
- Existing claimants will not be affected