A heavy smoker from the midlands who drives long distances in their diesel-powered car and burns through a lot of fossil fuel to keep themselves warm in winter will bear the brunt of Budget 2020.
The increase in Carbon Tax will add €1.02 to the cost of 60 litres of petrol and €1.18 to the same volume of diesel, while a 900-litre home heating delivery will cost an additional €15. A 12.5 kg bag of peat will cost 16 cent more and about 72 cent has been added to the price of a 40kg bag of coal.
Other measures which will benefit some people include an increase of €100 in the home carer tax credit to €1,600 while the self-employed tax credit goes up by €150 to €1,500. For most other people, the impact of a budget which has been “developed in the shadow of Brexit” will go almost unnoticed.
As had been widely flagged, there were no changes to the wider personal tax regime while social welfare payments were largely untouched.
- €1.2 billion fund excluding EU funding.
- €650 million will be provided for agriculture, enterprise and tourism, in event of no deal.
- €110 million provided via the Department of Agriculture, Food and the Marine.
- €85 million to beef farmers and €14 million for fisheries.
- €40 million to support the tourism sector in event of no deal.
- €365 million provided for Social Protection expenditure benefit in event of no deal.
- €45 million to assist people in transition to new work.
CLIMATE MEASURES & CARBON TAX
- Carbon tax increase of €6 per tonne (to €26) on petrol and diesel.
- 2c to a litre of petrol or diesel approx.
- 1% surcharge for diesel vehicles (introduced last year) replaced with a nitrogen oxide (NOx) emissions-based charge. Applies to all passenger cars registering for the first time from 01/01/2020.
- Home heating fuels increases will come into effect in May 2020.
- VRT relief for hybrid vehicles extended to 2020.
- €13 million for the Warmer Homes scheme.
- Benefit in Kind zero rate on electric vehicles extended to 2020.
- Equalisation of business and domestic electricity rates.
- 6.3% / €1 bn increase in expenditure to €17.4 billion.
- €25m extra for National Treatment Purchase Fund.
- 50 cent reduction in prescription charges for all.
- Drug Payment Scheme threshold reduced by €10 per month.
- Medical card income thresholds for over 70 increased by €50 single person / €150 couple per week.
- Free GP care extended to children under the age of eight
- Free dental care for children under 6.
AGRICULTURE & RURAL
- €2 billion investment in rural Ireland.
- €51 million extra for the Department of Agriculture, Food and the Marine.
- €17 million for the Department of Rural and Community Development.
- €3 million allocation to pilot new agri-environmental schemes.
- The farm restructuring relief programme is to be extended to the end of 2022.
- €11 billion allocated, increase of almost €2 billion.
- 150 new mainstream teaching posts.
- €1.9 billion investment in special education. 400 new teachers and over 1,000 special needs assistants.
- The National Training Fund levy increase by 0.1%.
- The Human Capital Initiative will receive €60 million to provide an additional 3,000 places in identified priority skills areas.
- €2.7 billion allocated, an increase of €384 million.
- €9 million for greenways and urban cycling projects among others.
- €3 million for electric vehicle infrastructure, doubling the amount of local authority charging points.
JUSTICE & DEFENSE
- €120 million / 4.7% increase for justice and policing.
- €81 million increase in budget for An Garda Síochána.
- 700 new Garda recruits.
- €39 million addition to broader justice sector and funding increasing costs in direct provision.
- Extra civilian staff will allow more trained guards to return to frontline policing.
- New forensic science laboratory and the redevelopment of Limerick prison.
- New Garda offices in Dublin to replace Harcourt Square.
- €2.5 billion to the Housing Programme in 2020.
- €1.1 billion allocated to support delivery of 11,000 new social homes in 2020, 12,000 in 2021.
- €80 million extra for the Housing Assistance Payment scheme.
- Help-to-Buy scheme extended for a further two years until end of 2021.
- €2 million extra to the Residential Tenancies Board.
- Stamp Duty for non-residential property increased by 1.5% to 7.5%.
- €17.5m extra to the Land Development Agency to provide new affordable homes.
- €130 million in Urban Regeneration and Development funding available next year.
- €20 million extra for homeless services to total of €166 million.
- €690m increase for the Department of Employment Affairs and Social Protection.
- 100% Christmas bonus to all social welfare recipients this year.
- The Living Alone Allowance increase by €5.
- One Parent Family Payment increase by €15.
- Working Family Payment income threshold will increase by €10 for families with up to three children.
- The Qualified Child Payment will increase by €3 for children over 12 and €2 for children under 12.
- Fuel allowance will increase by €2.
- One million additional home care hours will be provided in 2020.
- Those in receipt of Carer’s benefit can work or study up to 18.5 hours per week (up from 15).
- Home Carer Credit increase of €100 to bring the value of the credit to €1,600.
BUSINESS, ENTERPRISE AND INNOVATION
- €1 billion / 2% increase to the Department of Business, Enterprise and Innovation.
- €10 million will be allocated to a Disruptive Technologies Innovation Fund.
- EIIS scheme give full income tax relief in year of investment rather than spread as before; investment limit raised to €250k.
- An annual investment limit of €500,000 will be introduced for investors who are prepared to invest in the EIIS for > 10 years.
- R&D tax credit increased from 25% to 30% for micro and small companies.
- KEEP rules loosened (Key Employee Engagement Programme).
- SARP (Special Assignee Relief Programme) extension to 2022 for FDI companies to recruit and attract staff.
CAPITAL ACQUISITIONS TAX
- Group A tax-free threshold increase from €320,000 to €335,000 (transfers between parent and child broadly).
- 50 cents increase in excise duty on pack of 20 cigarettes, bringing average price to €13.50. With a pro-rata increase on other tobacco products.
- 2c to a litre of petrol or diesel approx.
RAINY DAY FUND
- €1.5 billion will be transferred, given that a No Deal Brexit is more likely.
DIVIDEND WITHHOLDING TAX
- Step 1 – from 1st of January 2020, increase in the rate of tax from 20% to 25%.
- Step 2 – from 1st of January 2021, Revenue will be introducing a modified Dividend Withholding Tax regime, utilising real-time data collected under modernised PAYE system.
TOURISM & OVERSEAS
- €40m announced for tourism specific initiatives.
- €21 million increase for Irish overseas development assistance, total of €837 million.
- Green Climate Fund increase of 100% which provides financial support to reduce greenhouse gas emissions in developing countries.
- The Department of Children and Youth Affairs will be allocated an additional €94 million.
- Túsla extra €29 million, to just over €814 million
- Funding for early learning and childcare will increase by €54 million.
Please note that this Budget Briefing is merely a general guide and should not be used as a substitute for professional financial advice. Decision making should be based on sound professional advice, taking into account your individual circumstances. While we have made every effort to ensure the accuracy of this Budget Briefing, we do not take any responsibility or liability for any omissions or errors, losses or injuries cause.
If you would like to talk to us about what Budget 2020 means for you, call us on 1890 606 570.