Budget changes taking effect later in 2019

Wednesday 27 February 2019

The headline announcements made by Pascal Donoghue in his Budget speech in the latter part of last year included changes to the entry point for the higher rate of income tax, an increase in VAT for hotels, a new parental leave scheme and a rise in the price of cigarettes.

Some of the measures such as the increase in cigarettes took effect from 9 October, many more have come into effect since 1st of January last and there are a number of measures that didn’t have specific timelines attached at time of the Budget Speech in October 2018.

What’s happening later this year?

Here are a few things that we know are happening within the coming months:

  • From November 2019, a new paid parental leave scheme will be introduced to provide two extra weeks’ leave to every parent of a child in their first year. 
  • In March,
    • All weekly social welfare payments will increase by €5.
    • The earnings disregard for the One Parent Family Payment will be increased, while a maintenance disregard will be introduced for the working family payment.
  • Payable prior to the beginning of the next school year, there will be a €25 increase in back to school clothing and footwear allowances.
  • As per the green public transport fund, Ireland will no longer purchase diesel-only buses for the urban PSO bus fleets after July.

Other Taxation Issues in place since 1st January

1. Income Tax & USC

For 2019, the entry point to the higher rate of income tax for all earners has increased by €750, to €35,300 for a single worker.

For married one-earner couples, has increased from €42,550 to €44,300.

There was also be increase in the Home Carer Tax Credit from €1,200 to €1,500. Similarly, there was an increase in the Earned Income Credit from €1,150 to €1,350.

On the 1st of January the USC band ceiling of €18,870 was increased by €502 to €19,372. There was also a reduction in the 4.75% rate that applies to a large number of workers to 4.5%.

As the minimum wage increases in 2019 from €9.55 to €9.80, this amendment to the band ceiling will ensures that those on minimum wage remain outside the higher rates of USC.

2. VRT

A 1% vehicle registration tax surcharge has been introduced for diesel engine passenger vehicles registered in Ireland since 1st of January 2019.

3. VAT (Changes since January 1st last)

The 9% VAT rate for hotels, restaurants and hairdressing has increased to 13.5%.

The VAT on e-books and electronically supplied newspapers has been reduced from 23% to 9%.

4. Betting tax

Betting duty has also increased from 15% to 25% on the commission earned by betting intermediaries and exchanges since January 1st

5. Landlords

Landlords will now be entitled to relief of up to 100% of the interest paid on loans for the purchase or refurbishment of residential property from the 1st of January this year.

6. Employers

The weekly threshold for the higher rate of employer’s PRSI took effect from the start of this year, increasing from €376 to €386.

There’s also a 1% increase in the National Training Fund Levy payable by employers in respect of earnings of employees in Class A and Class H employments.

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