2024 ROI Budget Summary
The Minister for Finance and the Minister for Public Expenditure and Reform delivered the ROI Budget on 10 October 2023 for the upcoming 2024 tax year and for the second year in a row, it has been labelled “A Cost of Living Budget”.
Overall, the 2024 Budget announcement had a main focal point on the well-being of young people and helping families and small businesses with the hope being that the changes, once implemented, would leave more money in the hands of consumers and businesses and offset some of the financial burdens from the inflationary cost of living increases.
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Personal Income Tax
- The standard rate band has been increased from €40,000 to €42,000 at the lower 20% rate of Income Tax (a saving of €400 per individual where the band is fully utilised)
- for married couples/civil partners with one earner the rate band has increased from €49,000 to €51,000
- €100 increase in the personal tax credit, employee tax credit and earned income tax credit
- Increase in the ceiling for the 2% rate of USC to €25,760
- The 4.5% rate of USC has been reduced to 4% (applicable to income between €25,761 and €70,044)
- increase in minimum wage to €12.70 per hour
- The reduced rate of USC of 2% for medical card holders earning less than €60,000 per annum has been extended for a further two years 31 December 2025
- PRSI rates will increase by 0.1% from 1 October 2024
- The minimum weekly hours threshold for eligibility for the Wage Subsidy Scheme for people with disabilities is being reduced from 21 to 15 hours from April 2024
- Families will get a double payment of child benefit before Christmas.
- Largest Social Protection Budget Package in the history of the State with a suite of financial support to assist people with the Cost of Living
- People getting Child Benefit will get a once-off double-payment for each child in December 2023.
- Child Benefit will be extended to children aged 18 who are in full-time education from September 2024.
- €400 Disability and Carer’s Lump Sum in November
- €400 lump sum for Working Family Payment recipients in November
- €300 Fuel Allowance lump sum in November
- €200 lump sum for those in receipt of the Living Alone Increase
- €100 Per Child once off payment for those who receive an Increase for a Qualified Child on their Social Welfare Payment
- Christmas Bonus and January Cost of Living Bonus to be paid to 1.3 million people
- Across the board increases in weekly payments of €12 from January 2024
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Housing, Electricity & Mortgages
- Introduction of temporary one-year mortgage relief for homeowners with an outstanding mortgage on their principal private residence of between €80,000 and €500,000 as of 31 December 2022 (20% tax relief on the increase in interest paid in the calendar year 2022 against that paid in 2023, capped at €1,250 per property)
- The rent tax credit has been increased from €500 per year to €750 from 2024
- Parents paying for their student children’s accommodation in the case of Rent a Room / “digs” accommodation can now claim this rent tax credit both going forward and retrospectively for the years 2022 and 2023
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Introduction of a Rented Residential relief for landlords. The relief will apply at the 20% standard rate as follows:
- €3,000 for 2024
- €4,000 for 2025
- €5,000 for 2026 & 2027
- €3,000 in the tax year 2024, €4,000 in tax year 2025 and €5,000 in tax years 2026 and 2027
- A full clawback of the Rented Residential relief will apply should the relevant property be removed from the rental market during this time
- The ‘Help to Buy Scheme’ is being extended until 31 December 2025 (The current maximum credit is 10% of the house price, up to a maximum of €30,000) and will include those in the Local Authority Affordable Purchase Scheme, from 11 October 2023
- The electricity credit from 2022 will make a come-back for the end of 2023 and into 2024. It will amount to an electricity credit of €450 for all households. This will be received in 3 instalments of €150. The first to be received before Christmas and the remaining €300 to be paid out in two instalments at the start of 2024
- The tax disregard in relation to personal income received by households who sell residual electricity from micro-generation to the national grid is doubling from 1 January 2024, resulting in an income disregard of up to €400 per year
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Business Taxation & Support
- Finance Bill 2023 will introduce a minimum effective corporation tax rate of 15% for companies that are members of a multi-national group with turnover in excess of €750 million
- Plans have been published for the introduction of a corporation tax participation exemption for foreign-sourced dividends with effect from 2025. The exemption will be included in Finance Bill 2024, following a technical consultation that is open until 13 December 2023.
- Increase in the R&D Tax Credit rate from 25% to 30%
- The year one refundable R&D tax credit is increasing from €25,000 to €50,000 which will give an immediate cash-flow benefit for companies
- The Employment Investment Incentive Scheme (EIIS) is being enhanced to double the maximum investment on which you can claim relief to €500,000 per annum where shares are held for a minimum of 4 years
- The ‘Film Tax Credit’ is being further extended to December 2028, and subject to State Aid approval, there will be an increase in qualifying expenditure on projects from €70m to €125m
- A revised bank levy is being introduced and is expected to raise €200 million in 2024
- Benefit in Kind – Motor Vehicles: The temporary universal relief of €10,000 to the original market value on certain categories of vehicles announced previously is extended to the end of 2024
- Energy-efficient equipment – This existing scheme for accelerated capital allowances is extended until 31 December 2025
- Capital gains tax angel investor relief – A new CGT relief for angel investment is being introduced with an effective reduced rate of 16% on a gain up to twice the value of an initial investment. The investment must be in the form of newly issued shares costing at least €10,000 and constituting between 5% and 49% of the ordinary issued share capital of the company. There is a lifetime limit of €3m on gains to which the reduced rate of CGT will apply
- Key Employee Engagement Programme (KEEP) – This scheme has been extended to the end of 2025 and the limit for the total market value of issued but unexercised qualifying share options has been doubled from €3m to €6m
- A once-off Increased Cost of Business Scheme (ICOB) grant will be rolled out in 2024 to help with business costs. The details of the scheme will be finalised for implementation in 2024
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VAT, Excise Duty and VRT Changes
- From 1 January 2024, the existing VAT registration thresholds are being increased from €37,500 for services and €75,000 for goods to €40,000 and €80,000 respectively
- For the third year in a row, the Flat Rate farmer addition has been reduced from 5% to 4.8% with effect from 1 January 2024
- The reduced rate of 9% applying to electricity and gas costs is being extended by 12 months to 31 October 2024
- The zero rate applicable to supply and installation of solar panels is being extended to include supplies made to schools
- The VAT zero rate will now apply to the sale of audiobooks and e-books with effect from 1 January 2024
- The VAT compensation fund for Charities will be increased from €5M to €10M allowing charities to recover more of the VAT incurred on expenses
- The Excise duty on a package of 20 cigarettes is to increase by €0.75 with a pro-rata increase for other tobacco products from 11 October 2023
- It is proposed to introduce a domestic tax on e-cigarettes and vaping products in Budget 2025
- The Carbon Tax charge (currently €48.50 per tonne) will increase by €7.50 per tonne from 11 October 2023, giving an increase in petrol and diesel overnight of between approx. 2c per litre
- While the expected final tranche of fuel excise increases have been deferred for petrol, diesel, and Market Gas Oil (MGO)
- The VRT relief for Battery Electric Vehicles which was due to end on 31 December 2023 is being extended to 31 December 2025
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Farming Reliefs:
- Consanguinity relief which applies a 1% stamp duty rate on certain land transfers between certain family members is being further extended for a period of five years to 31 December 2028
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The maximum aggregate lifetime limit of the following agricultural tax reliefs will be increased to €100,000 from 1 January 2023:
- Young Trained Farmer Stamp Duty relief
- Stock relief for Young Trained Farmers
- Relief for succession farm partnerships
- It was also announced that the stock relief for farmers in registered farm partnerships will be increased from €15,000 to €20,000 from 1 January 2024
- The accelerated capital allowances scheme for farm safety equipment has also been extended to 31 December 2026
- As mentioned above in the VAT section, the Flat Rate farmer addition has been reduced from 5% to 4.8% with effect from 1 January 2024
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Other Changes:
- Capital gains tax retirement relief – The upper age limit was extended to 70 from 66. The minister also introduced a limit of €10m on qualifying disposals to a child up to the age of 70. These changes will come into effect from 1 January 2025
- The Group B threshold of €32,500 will apply to foster children
- The Vacant Homes Tax which was introduced in Budget 2023 has been increased from three to five times the rate of Local Property Tax, commencing from 1 November 2023
- The Minister commented that amendments will be introduced to improve the efficiency of the Residential Zoned Land Tax, including that affected landowners should have sufficient opportunity to engage with the mapping process. He is therefore extending the liability date of the tax by one year to allow for the planned 2024 review of maps to take place
- CESOP Reporting for Payment Service Providers – PSPs operating within the EU will from 2024 be required to maintain records and file a quarterly report of cross-border payments by customers. This goes into effect on 1 January 2024, and the first reporting is due by 30 April 2024
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