Budget 2013

Detailed Breakdown

• 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

Changes for January 1st 2013

• The  standard rates of  USC will apply  to those aged  70 years of age  and over and  medical card holders (PAYE/self-employed income earners) earning €60,000 and above. This should be managed through the existing P2C / Tax Credit Import (to be confirmed with Revenue tomorrow).
• Removal of weekly PRSI allowance from full rate and modified rate PRSI contributors. Currently the first €127 per week (€551 per month) is exempt from PRSI but this will be discontinued in 2013.

Changes for July 1st 2013

• Maternity Benefit to be taxable for all claimants to bring them in line with other Social Protection payments.
• Collection of the Local Property Tax (LPT) will commence on 1 July 2013. The LPT will be administered by the Revenue Commissioners (i.e. through the payroll system)  
• o A half-year of LPT will be payable in 2013 with a full year payable in subsequent years. The tax will be charged at 0.18% of market value up to €1 million. A rate of 0.25% will apply to any excess value over €1 million.

Impact on 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

Impact on Consumer Spending

• 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