The Finance Bill – some initial thoughts

Some initial thoughts on the changes announced in today’s Finance Bill

  • The mooted changes to the Capital Acquistions Tax system are welcome, IF they help to simplify how CAT works and remove some of the anomalies in the system.  Until we see the detail of the changes, it will be impossible to tell whether these objectives will be met.
  • The imposition of VAT on refuse charges and other local services was inevitable since last year’s European Court ruling. That said, it is unfortunate that this measure will be accompanied by the scrapping of tax relief on service charges.  I estimate that this latter move will cost most householders €60-80 per year, from 2012.  In addition, the VAT charge will add a further €40-€55 to typical annual household refuse bills.  An unfortunate double-hit for consumers and families.
  • Tax relief on service charges was always one of the tax reliefs that many taxpayers simply forgot to claim each year. At least its removal will make it a little easier for an individual to correctly complete their own tax return.  Every cloud has …
  • The curbing of the 80% Windfall Tax is very welcome. Farmers and small landowners will not now have to worry about a punitive tax, when they wish to  sell an individual site  or give a site to their son or daughter.  This move might just give a little, and much-needed, boost to rural builders and tradesmen.  In the current climate the limit of €250,000 per 1-acre site is unlikely to affect (or worry) too many people.

More anon…