The winners and losers in Budget 2014
The tourism industry
Not only did the tourism industry get to keep its 9 per cent VAT rate as it had lobbied hard for in recent weeks, but it also got an added boost when the Government said it would abolish the travel tax. The move has been welcomed by everyone from airlines to
Incentives to start your own business featured strongly in the budget, with a two-year exemption from income tax for new businesses started by the long-term unemployed, tax relief for entrepreneurs investing proceeds from one business venture in another new startup and
Families with young children:
If you have children aged five and younger, they will be entitled to free GP care under new budget plans from January.
Pregnant women who previously would have fallen into the lower category for maternity benefit will now get extra money from January as the rates of maternity benefit are standardised at €230 per week.
Although it may not quite have been the package the construction sector had hoped for, the home renovation tax incentive scheme should give a lift to builders – as long as they are tax compliant The scheme, which applies to extensions and renovations to the home, window-fitting, plumbing, tiling and plastering, will provide an income tax credit to homeowners calculated at a rate of 13.5 per cent on all qualifying expenditure over €5,000 up to a maximum of €30,000. The Living City Initiative will also encourage the regeneration of areas in Dublin, Kilkenny, Galway and Cork. There’s also the Government’s €30 million plan for the State’s house building programme, which will deliver 500 houses, including new builds and the upgrade of previously uninhabitable units, adn the €10 million to be allocated for unfinished estates.
Mr Noonan promised 25 pro-business and pro-jobs measure in the budget. From the previously mentioned investment incentives to measures like the increase in cash receipts threshold for VAT, the budget is widely considered to have been beneficial to business. The decision not to touch the corporation tax was no surprise, but it may have eased a few concerns that the Government would be forced to raise it, even a few percentage points.
Losing their telephone allowance is one thing – that’s €9.50 per month – but pensioners appear to be being hit from all sides. Those with an income over €500 per week (€900 for a couple) face losing their medical card in favour of a GP only card, which may be a tough measure to swallow.
The 0.6 per cent levy on pension funds may be due to come to an end by December 2014, but in the meantime, Michael Noonan has decided to replace the charge with a 0.15 per cent levy on funds held in 2014 and 2015. Hat is currently being taken to mean that the levy on pension funds in 2014 will actually be 0.75 per cent.
Drinkers and smokers:
The old reliables were hit once more in the budget, with 10 cent added to measures of beer and spirits, and 10 cent to a packet of 20 cigarettes. Wine drinkers are being hit by 50 cent for the average bottle. Coming so soon after last year’s excise duty hike, it’s made the odd bottle of wine more of a luxury for many.
Up until Budget 2014, if you were under 22 and a new entrant to the jobseekers scheme, you could only claim the reduced rate of €100. That has now been extended to those under 25, and claimants won’t reach the full payout until 26 years of age. The Government was quick to point out that no such restrictions apply to the return to education scheme,
A levy that raises €150 million may swell the Government’s coffers, but it’s likely to hit the banks where it hurts – and could end up ultimately being passed on to hard pressed consumers in the form of higher mortgage interest rates and lower returns on their savings. And while they’re at it, the Government’s decision to increase DIRT to 41 per cent will have an adverse affect on savers too, and discourage them from putting their money away.