Budget 2013 -The Impact On Your Business

Updates Impacting SMEs

  • Reforming three-year corporation tax relief for start-up companies to allow unused credits to be carried forward
  • R&D tax credits – Doubling of initial spend qualifying for R&D credit from €100,000 to €200,000
  • The Credit Review Office will get more reviewers so they can deal with credit reviews more efficiently
  • Hauliers to get rebate on diesel from July 2013
  • Cash receipts basis for VAT being increased from €1m to €1.25m
  • Stock relief being extended for a further three years for farming sector
  • Funding increase for SMEs from €100m to €400m
  • Start-up relief extended for new trades
  • PRSI for Self-Employed – Increase to the minimum level of annual contribution from the self-employed from €253 to €500
  • 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%
  • Excise duty not being increased on petrol
  • Commitment to maintain the 12.5% rate of corporation tax
  • VRT for all motor tax bands will increase with effect from 1 January 2013.
  • Ireland has agreed a new Inter-Governmental Agreement with the US in relation to the US Foreign Account Tax Compliance Act
  • Enterprise Ireland allocated €139m to support indigenous Irish exporters in 2013
  • Extending of the Foreign Earnings Deduction for work related travel to certain countries beyond BRICS 
  • €11m in 2013 and €26m in a full year given to increase number of placements available in ‘labour market activation schemes’
  • Tourism VAT rate of 9% to be continued in 2013

 Payroll Updates

  • PRSI allowance for employees entirely abolished
  • PRSI will be payable on income generated from wealth such as rental income, investment income, dividends and interest on deposits and savings
  • 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
  • From July 2013 maternity benefit to be harmonised with other benefits. From 1 July 2013 income tax will apply to maternity benefit payments but no USC applicable to maternity benefit payments
  • No change to income tax rates or bands

Pensions

  • From 2014, tax relief on pension contributions will only subsidise pension schemes under €60k per annum
  • The reduced rate of Universal Social Charge for those over 70 with an income of more than €60k will be discontinued from 1 January 2013
  • People with AVCs will be allowed to withdraw up to 30 per cent of their value at the individual’s marginal rate of tax

Updates That Will Impact Consumer Spending Power/Confidence

  • From midnight, excise duty on a pint of beer or cider will increase by 10 cent, on a standard measure of spirits by 10 cent, and on a 75cl bottle of wine by €1
  • From midnight, the price of 20 cigarettes rises by 10 cent, while roll your own tobacco rises by 50 cent per 25g pack
  • Student contribution in higher education will be increased by €250 in each of the years 2013, 2014, 2015
  • Prescription charge for medical card holders to be increased and monthly cap for a family is being increased from €10 to €19.50 
  • Prescription charge for medical card holders to be increased from €0.50 to €1.50 per item
  • Child benefit rate to be reduced by €10 per month
  • Property tax to take effect from July 2013 for the second half of the year but Three-year property tax exemption for first-time buyers
  • Property tax payable on 0.18% market value of the property up to €1m. 0.25% on balance of property value over €1m