Budget Changes 2019

VAT, USC and Minimum Wage 2019

Budget 2019 was announced on 9th of October 2018. We are pleased to bring you our summary of the main changes that will affect you and your business.

We hosted a special Webinar on Friday the 12th of October to discuss how these changes affect you and your business.

CEO and founder of Accountant Online, Larissa Feeney explains each new change and how it is relevant to you as a business owner and as an individual.

Income Tax Threshold

Standard Rate Cut-off Point 2017 2018 2019
Single/Widowed €33,800 €34,550 €35,300
Married Couple, 1 Income €42,800 €43,550 €44,300
Married Couple, 2 Incomes €67,600 €69,100 €70,600
  • The threshold of income earned that is taxed at the lower tax rate will be increased from January 2019.
  • This mean employee can earn a high amount of income and still be taxed at the 20% income tax rate.
  • Single-earner and married one-earner couples have increased by €70
  • Married, two-earner couples has increased by €1,500

Earned Income Tax Credit

Earned Income Tax Credit 2017 2018 2019
Self-Employed €950 €1,150 €1,350
PAYE €1,650 €1,650 €1,650
  • The earned income tax credit for the self-employed will increase by €200, going from €1,150 to €1,350
  • The disparity between PAYE employees and self-employed people is getting narrower

Universal Social Charge (USC) Rates

2017 2018 2019
First €12,012 0.5% First €12,012 0.5% First €12,012 0.5%
€12,012 – €18,772 2.5% €12,012 – €19,372 2% €12,012 –  €19,874 2%
€18,772 – €70,044 5% €19,372 – €70,044 4.75% €19,874 – €70,044 4.5%
Balance over €70,044 8% Balance over €70,044 8% Balance over €70,044 8%
Non PAYE Income > €100,000 3% Non PAYE Income > €100,000 3% Non PAYE Income > €100,000 3%
Self-employed Income < €100K 11% Self-employed Income < €100K 11% Self-employed Income < €100K 11%
  • The entry point to USC remains at €13,000 however, the USC rates are being cut again. This is good news for those on minimum wage.
  • The 4.75% Bank has fallen to 4.5%.
  • The income for this band has risen by €502 which means that you can earn more and still be at the 2% USC band.
  • The benefits employee’s earning minimum wage.

Value Added Tax

VAT for hotels, restaurants, and hairdressing 2018 2019
9% 13.5%
  • From January 2019, VAT for hotels, restaurants, and hairdressing will revert to the same rate as before the recession.

Minimum wage

Minimum Wage 2017 2018 2019
€9.25 €9.55 €9.80
  • Minimum wage will increase by 25 cents an hour to €9.80 from 1st of January 2019.

Welfare

  • From March 2019, all weekly welfare payments, such as jobseeker’s and carer’s, will increase by €5 per week.
  • Christmas bonuses will be restored to double payment

Parental Benefits

  • From November 2019, there will be two extra weeks’ paid parental leave for every parent who has a child under one year.
  • Qualified Child payments, which is paid to parents on social welfare, will increase by €2.20 per week for children under 12 and by €5.50 per week for children over 12.

Capital Acquisitions Tax

Inheritance Tax Threshold 2018 2019
€310,000 €320,000
  • Inheritance tax applies to capital passed from parents to children.
  • You can receive gifts and inheritances up to a certain amount over your lifetime before you have to pay Capital Acquisitions Tax (CAT).
  • The increase applies to the lifetime ‘Group A’ tax-free threshold.
  • ‘Group A’ applies where the person who is receiving the gift or inheritance is a child of the person who is giving it.

Home Carer Tax Credit

Home Carer 2017 2018 2019
€1,100 €1,200 €1,500
  • Stay at home spouses will see an increase of €300 in their home carer tax credit.
  • Once Parent can also work part-time and still avail of this credit, given that their income doesn’t exceed €7,200 annually.

Mortgage Interest Relief

  • Mortgage Interest Relief will rise to 100% for landlords.
  • This means that landlords can deduct 100% of their mortgage interest against their personal tax bill.

Tax Relief for Startup Companies

  • The three-year tax relief for certain Startup companies will be extended until the end of 2021.

Controlled Foreign Company (CFC)

Multinational companies who are moving their assets to another tax jurisdiction will no face an exit tax of 12.5%.

Accountant Online is a firm of award-winning Chartered Accountants serving Ireland and the UK. Get in touch for a free consultation or send an email to hello@accountantonline.ie

Alternatively, you can find us on TwitterFacebook and LinkedIn.