Irish Budget | 2023

Analysis and commentary from FPM’s team of tax experts, identifying the key changes and outlining the practical implications for you and your business.

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The 2023 Irish Budget was announced yesterday, Tuesday 27th September 2022, by Finance Minister Paschal Donohue against a backdrop of increasing energy prices and a cost of living crisis. The Minister said: “This budget is and must be a cost of living budget, focused on helping individuals, families and businesses to deal with rising prices.”

The FPM Irish Budget Guide will help you check the main changes that could impact you or your business. A summary of the key points are laid out below.

Budget Highlights

• The 2023 Budget confirms an increase in the entry point for the higher rate of income tax of 40% to €40,000. The rate remains at 20% for income up to €40,000.
• The Minister announced the Temporary Business Energy Support Scheme which will pay up to €10,000 a month to businesses to cover up to 40% of the increase in their bills.
• The minister extended five agricultural reliefs that were due to expire this year: Young Trained Farmer and Farm Consolidation Stamp Duty Reliefs, the Farm Restructuring CGT relief, and the Young Trained Farmer and Registered Farm Partnership Stock Reliefs.
• Minister Donohoe announced a number of measures to help with the housing crisis including a new rental tax credit of €500, a new vacant homes tax and an increase in the amount landlords can claim in pre-letting expenses from €5,000 to €10,000
• A number of measures to help with the increase in the cost of living were announced including an electricity credit of €600 per household, two double payments of social welfare before the end of the year and extension of free GP care.

Key take-aways include:

Business Taxes

• Work is ongoing regarding the increase in Corporation Tax rate to 15% announced in last year’s budget.
• The Knowledge Development Box regime is extended for a further four years.
• The Film Corporation Tax credit is extended until the end of December 2028

Income Tax

• Increase in the standard rate band to €40,000 meaning top rate of income tax will only apply to income above €40,000.
• Increase of €75 in the personal tax credit and employee tax credit earned income credit.
• Increase in the ceiling for the second USC rate band from €21,295 to €22,920.
• New rental tax credit of €500 from 2022 tax yeer.
• The annual limit for tax free vouchers employers can give their staff is increasing from €500 to €1,000.

VAT

• The reduced VAT rate of 9% for electricity and gas extended until 28 February 2023.
• The zero rate of VAT will apply to Newspapers from 1 January 2023.
• The reduced VAT rate of 9% for the hospitality sector will expire on 28 February 2023.

For more information on what these changes mean for you, please don’t hesitate to get in touch!