The Key Points from Budget 2024
10th October 2023
Income Tax
The standard rate income tax band will be increased by €2,000 to €42,000 for single persons and to €51,000 for married couples with one earner; no other changes to income tax rates or bands.
The entry point for the 2% Universal Social Charge rate will be increased by €2,840 to €25,760.
The 4.5% Universal Social Charge rate will be reduced to 4%.
Exemption from the top rate of the Universal Social Charge for all medical card holders & those over 70 earning less than €60,000 is being retained for a further 2 years.
The Personal, Employee (PAYE) and Earned Income (Self-Employed) Tax Credits will be increased by €100 to €1,875.
The Home Carer tax credit will be increased by €100 to €1,800.
The single person child carer tax credit will increase by €100 to €1,750
The incapacitated child tax credit will increase by €200 to €3,500.
The Rent tax credit will be increased from €500 to €750 per year. In addition, it will also now be available to parents who pay rent for their student children who have tenancies in rent-a room or digs accommodation (this will be backdated for 2022 & 2023).
There will be a special mortgage interest tax relief introduced for one year available for some homeowners, those with variable & tracker mortgages who had an outstanding mortgage balance of between €80,000 and €500,000 at the 31st December 2022. This relief will be available on the increased interest paid on the mortgage in 2023, when compared with the amount of interest paid in 2022, at the standard rate and will be capped at €1,250 per property.
The sea-going naval personnel tax credit will be extended to the end of 2024.
The Help to buy (HTB) scheme will be extended in its current form until December 2025 and will be extended to applicants of the local authority affordable purchase scheme from the 11th October 2023.
There will be temporary tax relief for small landlords in that rental income of €3,000 for 2024, €4,000 for 2025 and €5,000 for each of the years 2026 & 2027 will be disregarded at the standard rate. Conditions will apply, namely the landlord must keep the property in the rental market for the full 4 years otherwise the full amount of the relief will be clawed back.
The Vacant Homes Tax will be increased to five times the property’s existing Local Property Tax rate and will be effective from the next chargeable period, November 2023. This tax applies to residential properties which are occupied for less than 30 days in a 12-month period.
The liability date of the Residential Zoned Land Tax will be extended by one year to allow for the planned 2024 review of maps to take place and to afford affected property owners a further opportunity to engage with the process.
The tax disregard in respect of personal income received by households who sell residual electricity from micro-generation back to the national grid will be doubled. From the 1st January 2024, an income disregard of up to €400 per year will apply to profits or gains arising to a qualifying person from the micro-generation of electricity. This will provide relief from income tax, USC and PRSI.
Corporation Tax
A minimum effective tax rate of 15% for large companies will be implemented as provided for under the OECD Pillar two agreement.
The main Corporation Tax rate will remain unchanged at 12.5% for companies with revenues less than €750m.
The Research & Development Tax Credit will be increased from 25% to 30% and the first-year payment threshold will be doubled from €25,000 to €50,000.
There will be a new targeted Capital Gains Tax relief for angel investors in innovative start up companies. It will allow angel investors to benefit from a reduced rate of CGT when they dispose of a qualifying investment, on gains up to twice the value of their investment.
The Employment Investment Incentive Scheme (EIIS) will be enhanced by standardising the investment period to four years for all investments and doubling the amount an investor can claim relief on for four years investments to €500,000.
The Key Employee Engagement Programme (KEEP) will be extended to the end of 2025 and the limit for the total market value of issued but unexercised qualifying share options will be increased from €3million to €6million.
There will be an increase in the current project cap on qualifying expenditure in the Section 481 Film Tax Credit, this is subject to state aid approval.
The accelerated capital allowances scheme for energy efficient equipment will be extended for a further two years.
The Bank Levy will be extended for another year.
The Defective Concrete Products Levy will be amended to exclude pre-cast products.
Business Supports
There will be a new Increased Cost of Business Scheme which will give a payment to small and medium businesses in the first quarter of 2024. The maximum grant will be equal to half of the rates bill of the business in 2023 and companies with an annual rates bill of up to €20,000 will be eligible. The scheme will be administered by the local authority.
Benefit in Kind – Motor Vehicles
In relation to the Benefit in Kind on company cars, the temporary universal relief of €10,000 to the Original Market Value will be extended for another year.
The tapering of the preferential Benefit in Kind relief will be suspended in order to encourage the use of electric vehicles for company car purposes. The existing €35,000 Original Market Value reduction will be maintained for 2024 & 2025. This will mean that an employee with an electric company vehicle will see an overall Benefit in Kind Original Market Value Relief of €45,000 in 2024.
VRT
The VRT relief for battery electric vehicles will be extended for a further two years to the end of 2025 and applies to battery electric vehicles with a value of up to €50,000.
Vat
The Vat Registration thresholds for businesses will be increased from €37,500 to €40,000 for services and from €75,000 to €80,000 for goods.
The reduced 9% Vat rate applicable to Electricity & Gas will continue for another 12 months.
The VAT rate on the supply and installation of solar panels for private dwellings will be reduced to zero from the 1st May 2023. It will be extended to schools with effect from 1st January 2024.
The Vat rate on audio books and e-books will be reduced to Zero from January 2024.
The funds available under the Charity VAT Compensation Scheme will be increased from €5 million to €10 million. This will mean Charities will get back more of the VAT that they pay.
No other changes to Vat rates.
Capital Taxes
The upper age limit for Retirement Relief will be extended from 65 until the age of 70. The reduced relief which was available on disposals from 66 onwards will now apply from age 70.
Amendments to ensure that foster children can avail of the Group B Capital Acquisitions Tax threshold based on their relationship to their foster parents will be brought forward.
Excise Duties
The price of 20 cigarettes will increase by 75 cents, with pro rata increases on other tobacco products.
A tax on e-cigarettes and vaping products will be introduced in next year’s budget.
The final tranche of fuel excise increases due to happen on the 31st October will be deferred. They will be restored in two equal amounts in April & August 2024 (8 cent for petrol, 6 cent for diesel & 3.40 cent for Mineral Gas Oil).
Carbon Tax
The rate per tonne of carbon dioxide emitted for petrol and diesel will go up from €48.50 to €56 on auto fuels from the 11th October and all other fuels from 1st May 2024.
Farming
Consanguinity (stamp duty) relief will be extended for a period of 5 years to provide more certainty to farming families as they plan for the future.
The flat rate addition for farmers will reduce from 5.0% to 4.8% from 1st January 2024
The accelerated capital allowances for farm safety equipment will be extended.
The maximum aggregate lifetime limit of a number of farm-related reliefs will be increased to €100,000, which is the maximum allowable under the new EU Agricultural Block Exemption Regulation (ABER) that came into effect on 1st January. These reliefs include the Young Trained Farmer Stamp Duty relief, Stock relief for Young trained farmers, and the relief for succession farm partnerships.
The maximum amount of enhanced stock relief for farmers who are partners in a Registered Farm Partnership will be increased from €15,000 to €20,000 in line with EU regulations.
The Land Leasing Income Tax Relief will be amended so that it only becomes available when the land has been owned for seven years so that it is better targeted to active farmers.
Welfare
An increase of 0.1% in all PRSI contribution rates from 1st October 2024.
There will be a €12 increase in the state pension & other welfare recipients in 2024.
A Christmas Bonus of 100% will be paid to all social welfare recipients.
The working family payment thresholds will be increased by €54 per week.
The qualified child payment will be increased to €54 per week for Over 12’s and to €46 per week for Under 12’s.
The rate of the Domiciliary Care Allowance will increase by €10 to €340.50 per week.
Parents’ Benefit will be extended to 9 weeks from August 2024.
The Child Benefit payment will be extended to 18-year-olds in full time education.
Childcare & Students
There will be a further reduction up to 25% in the weekly fee for those availing of the National Childcare Scheme
The statutory foster care rate will be increased by the end of 2024 by €75 to €400 per week for children under 12 and €73 to €425 per week for children over 12.
The hot school meals programme will be expanded to a further 900 primary schools in April 2024.
Free schoolbooks will be extended for all junior cycle pupils in recognised post primary schools within the free education scheme from September 2024.
Cost of Living (Once-off) Measures
An Electricity Credit of €450 for all households to be paid in three instalments of €150 between December & April, with the first before Christmas.
A once-off double week will be paid in January to all welfare recipients including pensioners, carers, people on disability payments and jobseekers.
An additional lump sum payment of €400 to those in receipt of the working family payment.
An additional lump sum payment of €400 to those in receipt of the Carer’s Support Grant, Disability Allowance, Blind Person, Invalidity Pension and Domiciliary Care Allowance.
A double payment of Child Payment, worth an additional €140 for each child, will be made to all qualifying households before Christmas.
A double payment of the Foster Care allowance will also be made this year.
A €300 lump sum payment will be made to recipients of the Fuel Allowance in the last quarter of this year
All recipients of the Living Alone Allowance will receive a once-off payment of €200 before Christmas.
An extension of the fee reduction on school transport services for a further year.
An extension of the fee waiver for students sitting state exams.
A once-off reduction in the Student Contribution of €1,000 for eligible students in the 22/23 academic year
A once-off reduction of approximately 33% in the contribution fee for apprentices in higher education
An increase in the Post Graduate Tuition fee contribution by €1,000 for student grant recipients
Other
The national minimum wage will increase by €1.40 per hour to €12.70 per hour from 1st January 2024.
The 20% public transport fare reduction will be extended to the end of 2024. The eligibility for the Young Adult Card is being extended to cover adults aged 19-25.
There will be a 1% reduction in the Motor Insurers Insolvency Compensation Fund Levy from 1st January 2024.
The threshold for tax relief on the donation of heritage items will be increased from €6 million to €8 million.
We hope you find this information useful. If you have any questions, feel free to contact us.
Timothy Kelliher & Company Limited
Chartered Accountants
Landline/WhatsApp: +353 (0) 64 6632105
Email: info@timothykelliher.ie
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