Budget 2015: The Full List of Measures

October 14, 2014

Here is the full list of Tax measures included in Budget 2015.

Some, but not all, of  these measures were unveiled in Minister Noonan’s Budget Speech to the Dáil this afternoon.

Michael Noonan announces Budget 2015.

Michael Noonan announces Budget 2015.

Income Tax 

The standard rate band of income tax increases by €1,000 from €32,800 to €33,800 for single individuals and from €41,800 to €42,800 for married one earner couples.

The higher rate of income tax falls from 41% to 40%.

USC

The USC rates and bands for 2015 are as follows:

Incomes of €12,012 or less are exempt.

  • Otherwise the first €12,012 is @ 1.5%
  • From €12,013 to €17,576, USC is @ 3.5%
  • From €17,577 to €70,044, USC is @ 7%
  • From €70,044 to €100,000, USC is @8%
  • PAYE income in excess of €100,000 faces a USC charge of 8%
  • Self-employed income in excess of €100,000 faces a USC charge of 11%.

There are now 8 different bands of USC, a tax which is now more complex than ever before.

Tobacco 
The excise duty on a packet of 20 cigarettes rises  by 40 cents (including VAT). A  a pro-rata increase on other tobacco products will also take immediate effect.

The excise duty on roll-your-own tobacco rises by an additional 20 cents (including VAT) per 25g pouch, again immediate effect.

Betting Duty
Betting Duty is being extended in 2015 to remote operators and betting exchanges.

Vehicle Registration Tax (VRT)

The VRT reliefs on the purchase of

  • hybrid electric vehicles,
  • plug-in hybrid electric vehicles,
  • plug-in electric vehicles, and
  • electric motorcycles

are being extended to 31 December 2016.

Microbreweries
The special relief on Excise Duty, which cuts the standard rate of Alcohol Products Tax by 50% on beers from microbreweries producing 20,000 hectolitres or less per annum is being extended to microbreweries  produce 30,000 hectolitres or less per annum.

Mineral oil

A 30 day deferral of excise duty on mineral oil is to be introduced.

Natural Gas as a Transport Fuel

The excise rate for Natural Gas and BioGas as a propellant (ie transport fuel) will be set at the current EU Minimum rate and this rate will be held for a period of eight years.

Artists’ Exemption 

The threshold for the artists’ exemption from Income Tax is being increased from €40,000 to €50,000.

The Exemption is also being extended to non-resident artists, who are resident in another EU/ EEA State.

The Foreign Earnings Deduction is being extended for a further 3 years until the end of 2017 and is now widened to  include Chile, Mexico and certain unspecified countries in the Middle East & Asia.

The number of qualifying days abroad is being reduced from 60 to 40.

The minimum stay in a country is cut to 3 days and now includes travelling time.

The Special Assignee Relief Programme is also being extended for a further 3 years, until the end of 2017.

The upper salary threshold is being removed.

The residency requirement is being amended to only require Irish residency.

The exclusion of work abroad is also removed.

The requirement to have been employed abroad by the employer is being reduced to 6 months.

Employment and Investment Incentive
The EII is being amended “to raise company limits, increase the holding period by 1 year and include medium-sized companies in non-assisted areas and internationally traded financial services”. These measures are subject to EU approval.

Hotels, guest houses and self-catering accommodation will remain eligible for a further 3 years, and the operation and management of nursing homes will be included for  the next 3 years.

Seed Capital Scheme
The scheme is being rebranded as “Start-Up Relief for Entrepreneurs” (SURE) and being widened to included those who have been unemployed up to 2 years.

Rent-A-Room  Scheme

The threshold for exempt income under the Rent-A-Room Scheme is being increased from €10,000 to €12,000 per annum.

Water Charges
Tax relief at 20% will be provided on water charges, up to a limit of €500 per annum. Relief will be given annually for charges paid in the previous tax year.

Home Renovation Incentive
The Home Renovation Incentive (which allows a 13.5% tax rebate on refurbishment, extension and improvement work) will now include rental
properties “owned by landlords subject to income tax”.

Capital Gains Tax

The CGT incentive relief, which provided Capital Gains Tax exemption in respect of the first 7 years of ownership, for properties purchased between 7 December 2011 and 31 December 2014 will not being extended beyond 31 December 2014.

Where property purchased in this period is held for seven years, the gains accrued in that period will not attract CGT.

Windfall Tax

The 80% Windfall Tax on land disposal gains & land development profits attributable to planning decisions is being abolished from 1 January 2015.

Farming

The amounts of long term land leasing income exempt from Income Tax rises by 50%.  A new threshold is being introduced for lease periods of 15 or more years, with income of up to €40,000 being exempted.

The long term land leasing income exemption is also being extended to companies which lease land.

The 40 years of age threshold for leasing relief is being abolished.

 

Income averaging, which allows full-time farmers to calculate their income tax position based on rolling average earnings over 3 years, will now be revised to calculate incomes over 5 years.

It is also extended to farmers with other income from “on-farm diversification”.

 

The farmer’s flat-rate addition rises from 5% to 5.2%. This addition VAT-unregistered farmers for VAT incurred on their farming inputs.

 

The deadline for Capital Gains Tax relief for farm restructurings  is being extended to 31 Decemeber 2016.

CGT Retirement Relief can now apply to land that has been leased for up to 25 years in total (increased from 15) ending with disposal.

Retirement Relief is being extended to land currently let under conacre (11 month letting) and which is disposed of by 31 December 2016 or enters a long-term (5-25 years) letting arrangement (ending with disposal) by that date.

CAT Agricultural Relief will now only be available:

  • for agricultural property gifted to or inherited by active farmers, and
  • to individuals who are not active farmers but who lease out the property on a long-term basis for agricultural use to active farmers.

In addition, 5-35 year Agricultural leases  to active farmers will be exempt from Stamp Duty.

Consanguinity relief, which halves the applicable rate of Stamp Duty, will be extended for a period of three years for transferors under 65 years old, where the transferee is an active farmer.

Corporation Tax

The 2003 base year restriction for the R&D Tax Credit is being removed from 1 January 2015.

The limited Corporation Tax relief on trading income (and certain capital gains) of new start-up companies in the first 3 years of trading is being extended until the end of 2015.

This 80% restriction on aggregate capital  allowances in respect of intangible assets (and any interest expense incurred on borrowings to fund the expenditure) will be removed.

The Accelerated Capital Allowances for Energy Efficient Equipment, which incentivises companies to invest in energy efficient equipment, is being extended to the end of 2017.

DIRT

A new relief from DIRT will apply on savings used by first time house buyers towards the deposit on their first home.

The Dept of Finance Summary of 2015 Budget Measures is here.


Budget 2015: The Key Tax Measures

October 14, 2014

The main tax measures of Minister Noonan’s Budget 2015 Speech, announced this afternoon, are as follows:

Budget 2015

Corporate Taxes

The 12.5% Corporation Tax rate remains unchanged.

The R&D Tax Credit base year provisions will be phased out.

The 3 year Corporation Tax exemption for start-ups is to be extended.

A new “Knowledge Development Box” will be introduced to attract new inward investment.

The “Double Irish” tax loophole is to be eliminated. All Irish-registered trading companies must also be tax-resident here. This will apply with immediate effect for new companies and will be phased in for existing companies.

Farming

To encourage long term leasing of land, the income tax threshold for land leasing is to be extended by 50%.

The CGT retirement relief on farm land is to be extended.

The existing CAT relief on agri land is being restricted to actively farmed land.

Stamp duty is being scrapped on long term land leasing.

The stamp duty relief for farm transfers within families is being extended.

The range of farmers’ Income Averaging is extended from 3 to 5 years.

Income Averaging is also being extended to farmers with diversified farm income.

The farmers’ flat rate VAT addition is up from 5% to 5.5%.

Tourism

The 9% VAT rate for tourism enterprises is being retained.

Pension Levy

The 0.6% pension levy is being scrapped at the end of 2014.

Property Market

The Home Renovation Incentive has attracted €190m worth of work so far.  It is being extended to rental properties whose owners are registered for income tax. This comes in with immediate effect.

The 7 year CGT exemption is being abolished.

A refund of DIRT tax will apply to first time buyers who use their savings to buy their first home.

The existing 80% windfall tax is being abolished.

Water Charges

Income Tax relief at the standard 20% rate will apply to water charges paid by householders.

SME Sector

The Foreign Earnings Deduction is being widened and extended to a range of new countries.

Income Tax

Today’s budget is intended to form the first stage in a 3-year programme of income tax reform and reductions.

The USC entry point will be increased to approx €12,000 and the other USC bands will be increased accordingly.

The 2% USC rate is being cut to 1.5%

The 4% USC rate is being cut to 3.5%

The 41% Income Tax rate is being cut t0 40%.

The standard rate (20%) tax band is being increased by €1,000 per annum.

A new USC rate of 8% for income in excess of €70,000.

A new USC rate of 11% for self-employment income in excess of €100,000.

Excise Duty

Microbreweries will enjoy an increase an the annual excise exemption ceiling. The existing relief for microbreweries was originally introduced in 2005 by Brian Cowen as Minister for Finance.

The price of 20 cigarettes will increase by 40 cents, with a corresponding increase in other tobacco products.

No rise in taxes on alcohol, petrol, diesel or VRT.


Revenue confirm ROS Pay & File Tax Return Deadline is 14 November 2013

April 4, 2013

A Revenue eBrief today confirms that this year’s Pay & File deadline for 2012 tax returns is being extended for online returns from 31 October to Thursday 14 November 2013.

However, this is subject to some terms and conditions.

14 November 2013 Pay & File Tax Deadline

To avail of the extended deadline, you must, by 14 November next

  1. file your 2012 Form 11 Income Tax return using the online ROS system.
  2. make your ‘Pay & File’ payment via ROS, to cover:
  • your Preliminary Tax for 2013;  and
  • any remaining balance of Income Tax you owe for 2012.

The extended deadline only applies, if:

  • you file your Form 11 tax return on ROS; and
  • you use ROS to make the required Income Tax payment.

Capital Gains Tax

The Revenue eBrief makes no mention of any extension to the Capital Gains Tax return filing deadline of 31 October 2013.  If you pay Income  Tax under self-assessment, you must file your Capital Gains tax details as part of your 2012 Form 11 Income Tax Return.

The deadline for such ROS-filed returns may now extend to 14 November.

On the other hand, if you pay all your taxes under the PAYE system, and had a 2012 Capital Gain, you must file a Form CG1 Capital Gains Tax return by the earlier deadline of 31 October.

Capital Acquisitions Tax

The deadline extension also applies to Capital Acquisitions Tax (CAT) payments and IT38 returns for gifts or inheritances with valuation dates in the year ended 31 August 2013. Again,  return & tax payment must both be made through ROS.

Pension Payments

In previous years, the extended November deadline has also applied for the purposes of RAC, AVC and PRSA pension payments.

Today’s Revenue eBrief does not mention this particular issue although I expect that the 14 November deadline will again extend to such payments, where the individual pays & files via ROS by 14 November.

If you are considering making a pension payment in November and wish to claim the tax relief against your 2012 liability, you should first double-check that the extended deadline applies to pension payments.

Unless you are 100% sure,  it is safer to work on the assumption that the previous 31 October deadline applies, and to make any your qualifying pension payment by the end of  October.


Do You Have a Capital Gains Tax Bill This Thursday?

January 29, 2013

Don’t forget, this Thursday, 31 January is the deadline for payment of Capital Gains Tax on disposals in December 2012.

For more, see my recent blog post: https://mcgibney.ie/2013/01/10/31-january-is-capital-gains-tax-payment-deadline/

31 January is Capital Gains Tax Deadline Day

I strongly recommend that you seek professional advice and assistance if you think that you may have a liability to Capital Gains Tax.


Act Now to File Your UK Tax Return by 31 January

January 21, 2013

If you have UK source income, you may be obliged to file a UK Self Assessment tax return. 31 January is the deadline for filing your 2011/12 return online. This covers the year ended 5 April 2012.

If you are liable to file a return, and haven’t done so, you will need to act now in order to meet the deadline. If you miss it, you will face an automatic £100 penalty – even if you have no UK tax liability.

HMRC

Fail to file within a further 3 months (i.e., by 30 April) and you will be hit with an extra £10 per day; after six months, a further £300 (or 5% of your tax liability, if higher), and worse penalties still if you file even later.

If you think you may be liable to file a UK return, first check the criteria set out on the HMRC website.

In short, you will need to file a return if:

  • you had self-employment income in the UK (including Northern Ireland) in the year ended 5 April 2012.
  • you are a director of a UK company.
  • you have income from savings, investments or property in the UK.
  • you need to claim expenses or reliefs against UK PAYE income.
  • you sold UK property or assets in the year ended 5 April 2012 and have a UK Capital Gains Tax liability.

If you are liable, you will need to act swiftly in order to meet the deadline. This is especially so, if this is your first time to to register for UK income tax.  As a first-time HMRC filer, you will first need to obtain a 10-digit Unique Taxpayer Reference (UTR number)  from HMRC Online Services.

HMRC Online Services advise that you must register with them by today (21 January) in order to receive your UTR number ahead of the 31 January deadline.

If you would like us to file your UK return before the deadline, don’t delay, call us now.


31 January is Capital Gains Tax Payment Deadline

January 10, 2013

Thursday 31 January is the deadline for payment of Capital Gains Tax on disposals in December 2012. If you made a Capital Gain in December, you will need to calculate pay your Capital Gains Tax liability by 31 January.

Capital Gains Tax (CGT) is charged on

  • the sale of property or other assets.
  • other disposals, eg the gift of an asset to a relative or other third party,and
  • where insurance proceeds or another “capital sum” is received in respect of an asset.

31 January is Capital Gains Tax Deadline Day

On this occasion, you need to take special care to ensure that you apply the correct CGT rate in calculating your liability.

The Capital Gains Tax rate for the period from 1 to 5 December inclusive is 30% of the Capital Gain. An increased rate of 33%, applies on transactions from 6 December onwards, announced recently in Budget 2013 .

If you have a liability for December 2012, you must, by 31 January:

  • Calculate or estimate your liability.
  • Pay the liability by cheque or draft to the Collector General, FREEPOST, Francis Street, Limerick, attaching a CGT payslip which includes your name, address and PPS number
  • If you are registered on the Revenue ROS system, you can process your payment online (which I recommend) and even pay by credit card (which I don’t recommend).

If you expect to have a liability but don’t yet know the exact amount, you should still pay your best estimate by 31 January. To avoid interest charges, it may be wise to pay a little more than your expected liability.

When your Capital Gains Tax position is finalised (ie when you file a 2012 Income Tax Form 11 or Capital Gains Tax Form CG1 Return by 31 October 2013), Revenue will bill you for any shortfall or refund you any overpayment.

The Revenue.ie website includes some useful online guidance on Capital Gains Tax but I strongly recommend that you seek professional advice and assistance if you think that you may have a Capital Gains Tax liability.


This Saturday is Capital Gains Tax Deadline Day

December 13, 2012

Next Saturday, 15 December, is the deadline for payment of Capital Gains Tax on disposals in the period from 1 January to 30 November 2012. If you made a Capital Gain during this period, you must pay your Capital Gains Tax liability by Saturday, or face possible interest charges for late payment.

Capital Gains Tax (CGT) normally arises on the sale of property or other assets. However a liability can also arise on other occasions when an asset changes hands, for example when an asset is gifted or exchanged for another non-cash asset.

CGT can also arise in certain other situations where a capital sum (eg insurance proceeds) is derived from an asset.

Capital_Gains_Tax Deadline 2012

The rate of CGT for the period January-November 2012 is 30% of the Capital Gain. The increased rate of 33% announced in the recent Budget 2013 applies only to disposals after Budget Day, 5 December.

If you have a liability for January-November 2012, you must, by Saturday:

  • Calculate or estimate your liability.
  • Send a cheque or draft for that amount to the Collector General, FREEPOST, Francis Street, Limerick.
  • Attach to your payment,  a CGT payslip which includes your name, address and PPS number.

If you expect to have a liability but don’t yet know the exact amount, you should nevertheless pay your best estimate by Saturday. In order to avoid becoming liable for interest charges, I would recommend in such situations that you should consider paying a little more than your expected liability.

Therefore when you finalise your Capital Gains Tax position by filing an Income Tax Form 11 or Capital Gains Tax Form CG1 Return for 2012, Revenue will refund you the amount you have overpaid.

The Revenue.ie website includes some useful guidance on Capital Gains Tax but I recommend that you seek professional assistance if you suspect that you may have a CGT liability.