Quintas gets first access to Minister Noonan's Budget documents, 24 hours in advance!
Quintas Tax Director, Dave O’Brien, gets the inside scoop on Budget 2017 after bumping into Minister Noonan on the steps of Leinster House. While he didn’t get to see the full Budget speech, as the Minister has yet to write it, he did manage to see the main points of Budget 2017.
Minister Noonan, will either begin or end his speech (he hasn’t decided yet) confirming our commitment to the 12.5% corporate tax rate. He will mention the Apple case and outline the reasons why the country needs to appeal this EU decision.
Unfortunately Budget 2017 has very little tax cuts to speak of. This Budget will be more focused on spending rather than tax cuts. However there will be some token gestures, unless the Minister changes his mind between now and tomorrow afternoon:
- The two lower USC rates will each decrease by 0.5%.
- The old age pension will increase – the amount still hasn’t been decided. He had €2.50 a week written down payable in 6 months time, but with a question mark beside it. This question mark is courtesy of Fianna Fail – will this be the item that brings down the budget and the government?
- Home carers credit will be increased from the current amount of €1,000 to €1,200. This amount is available when a spouse stays at home to take care of the children.
- PAYE tax credit could be ceased for PAYE incomes over €100k – A decision on this will not be made until the last minute. It will cost those earning over this amount €1,650 per annum. It is probably an equitable way of increasing the tax take, but won’t be popular with friends of Fine Gael.
- DIRT will go from 41% to 40%.
- A pack of cigarettes will increase by 30 cent but there will be no increase to petrol or alcohol.
- Minimum wage will increase by 10 cents per hour.
- Mortgage Interest relief on rental properties will increase from 75% to 80%.
- EII investments have been outside of the high earners restriction for the last 3 years. This was due to end in 2017 however, the government will extend this for another 12 months. The maximum EII investment any one person can make in a year will be increased from €150k to €175k.
- A new employee share remuneration scheme will be introduced but will be light on details. This results from a department of finance consultation on the topic during the year.
- There will be minimal tweaks to the knowledge development box but details will be sparse.
- The earned income credit for self-employed individuals, which is the equivalent of the PAYE credit for employees is to be increased to €1,100 and will get to €1,650 by 2018.
- Entrepreneur credit has improved, with a view to having it the same as the UK in the near future. Unfortunately Dave couldn't make out whether this applies to new businesses or existing businesses. The detail of this will be in the Finance Bill.
- The 9% VAT rate will stay for the tourist sector. However Minister Noonan will include a warning to hoteliers to pass the gain onto the customer.
- First time buyers to get a tax refund of up to 5% of the purchase price on a new build - this will help with the deposit.
- Childcare package will be introduced for families earning less than €50k per year.
- The home renovation scheme will be extended for another 24 months. This is where you get a tax refund for monies spent on improving your home and rental property.
- Sugar tax will be mentioned but will not come in until 2018.
- A new tax credit for sea farers to be introduced.
- Capital Acquisitions Tax (inheritance tax) group A tax free threshold will move to €500k over the next 3 budgets - he might however just mention that it is increasing to €320k to make sure people don't wait to transfer assets. Expect small increases to the other bands as well – numbers have yet to be agreed.
So there you have it, Budget 2017 in a nutshell, 24 hours before Minister Noonan speaks in front of the Dail. Obviously the above was written before his final meeting with Messers Martin and McGrath and so will be subject to change…..in hindsight maybe Dave would have been better off seeing Fianna Fails budget proposals instead of Fine Gaels such is the way of the world in Leinster House at the moment.
On the basis that they can agree on the old age pension increases we can actually see this Budget being passed, which is an achievement in itself.
Disclaimer: Dave O'Brien did not actually meet with Minister Noonan and has had no access to his Budget speech. The above is therefore an educated guess on what will be included and Quintas bears no responsibility for the accuracy of the above - in other words you would be better off waiting until Tuesday afternoon to get the actual Budget facts!
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