person holding pen

Income Tax

Budget 2018

There have been no changes to the rates of income tax. The point at which a person enters the higher tax rate has increased by €750 from €33,800 to €34,550, creating a potential tax saving of €150.

The Earned Income Credit has been increased by €200 to €1,150. This credit is available to taxpayers earning self-employed trading or professional income and to business owners / managers who are ineligible for a PAYE credit on their salary income.

The Home Carer Credit is being increased by €100 from €1,100 to €1,200.

0% rate on BIK on electric vehicles for 2018 with a review thereafter.

Tax credits (main)

Tax credit

2018 (€)

2017 (€)

Single person

1,650

1,650

Married person

3,300

3,300

PAYE credit

1,650

1,650

Earned Income Credit

1,150

950

Single person child carer

1,650

1,650

Incapacitated child credit max

3,300

3,300

Age tax credit – Single or widowed

245

245

Age tax credit – Married

490

490

Dependent relative

70

70

Home carer

1,100

1,000

Fishermen tax credit 1,270 -


Tax bands

Personal circumstances

2018 (€)

2017 (€)

Single or widowed without dependent children

34,550 @ 20%

Balance @ 40%

33,800 @ 20%

Balance @ 40%

Single or widowed qualifying for single person child carer credit

38,550 @ 20%

Balance @ 40%

37,800 @ 20%

Balance @ 40%

Married, one spouse with income

43,550 @ 20%

Balance @ 40%

42,800 @ 20%

Balance @ 40%

Married, both spouses with income

43,550 @ 20% with increase of 25,550 max.

Balance @ 40%

42,800 @ 20% with increase of 24,800 max.

Balance @ 40%


Exemption limits

Personal circumstances

2018 (€)

2017 (€)

Single or widowed, 65 years of age & over

18,000

18,000

Married, 65 years of age & over

36,000

36,000


Universal Social Charge

Income (€)

Rate

 

2018 (€)

2017 (€)

Persons aged 70 and over with a medical card and income is €60,000 or less will pay a maximum of 3.5% USC

Up to 12,012 @ 0.5%

12,013 – 19,372 @ 2%

19,373 – 70,044 @ 4.75%

Balance @ 8%

Up to 12,012 @ 0.5%

12,013 – 18,772 @ 2.5%

18,773 – 70,073 @ 5%

Balance @ 8%

Non PAYE income above 100,000

11%

11%

Tax rates (main)

Tax head

Rate

 

2018

2016

Income tax

20% / 40%

20% / 40%

Corporation tax

12.5% / 25% / 6.25%

12.5% / 25%

Capital Gains Tax

33% / 10%

33% / 20%

Capital Acquisitions Tax

33%

33%

Value added Tax

23% / 13.5% / 9%

23% / 13.5% / 9%

Deposit Interest Retention Tax

39%

41%

USC

0.5% / 2% / 4.75% / 8%

1% / 3% / 5.5% / 8%

PRSI (employee / self-employed)

4%

4%

PRSI (employer)

8.5% / 10.75%

8.5% / 10.75%

Stamp Duty (residential)

1% - 2%

1% - 2%

Stamp Duty (commercial)

6%

1% - 6%

Previous tax rates

Budget 2016

There have been no changes to the rates or thresholds of income tax.

Workers earning under €13,000 per annum will be exempt from the USC.

There has been a change in the USC rates and thresholds as per table 4 on page 7.

An Earned Income Credit of €550 is being introduced for taxpayers earning self-employed trading or professional income and to business owners / managers who are ineligible for a PAYE credit on their salary income.

A new farm succession plan is to be introduced with a maximum €5k tax credit per annum for 5 years available. This new model is subject to EU State Aid approval.

General stock relief, stock relief for Young Trained Farmers, stock relief for Registered Farm Partnerships is being extended until 31 December 2018.

The Home Carer Credit is being increased by €190 from €810 to €1,000 with the income threshold increasing to €7,200 from €5,080.

The entry level to the higher employer PRSI rate is increasing from €356.01 per week to €376.01 week.

The statutory minimum wage will increase to €9.15 per hour from €8.65 per hour from 01 January 2016

Budget 2015

The top rate of income tax has been reduced from 41% to 40%.

The standard rate cut off point has been increased from €32,800 to €33,800 and proportionately for married couples and single parents.

A new water tax credit will be available at 20% of charges incurred (subject to a maximum charge of €500) payable in arrears. For example, a €350 charge incurred in 2015, a tax credit of €70 will be available in 2016.

Income averaging for Farmers will be available to farmers who derive off farm income and increased to 5 years from 3 years. This will be reviewed after 3 years.

There is a 50% increase in the exemption threshold for leasing out farmland with a new threshold for leases of 15 years and over.

New Film Relief scheme is to commence in 2015.

There is an increase in the amount of finance that can be raised by a company under the Employment and Investment Incentive to €5m annually subject to a lifetime maximum of €15m.

The table below outlines the income tax position with regard to the main tax credits for 2015.

Tax credit 2015 (€) 2014 (€)
Single person 1,650 1,650
Married person 3,300 3,330
PAYE credit 1,650 1,650
Incapacitated child credit max 3,300 3,300
Single Person Child Carer credit 1,650 1,650

The table below sets out the tax rates and bands for 2014.

Personal circumstances 2015 (€) 2014 (€)
Single / Widowed without
dependent children
33,800 @ 20%
Balance @ 40%
32,800 @ 20%
Balance @ 41%
Single / Widowed qualifying
for one parent family tax credit
37,800 @ 20%
Balance @ 40%
36,800 @ 20%
Balance @ 41%
Married couple, one spouse
with income
42,800 @ 20%
Balance @ 40%
41,800 @ 20%
Balance @ 41%
Married couple, both spouses
with income
42,800 @ 20% with
increase of 24,800 max   
Balance @ 40%
41,800 @ 20% with
increase of 23,800 max
Balance @ 41%

Top slicing relief on taxable lump sum termination payments is to be abolished.

Maternity Benefit which has been taxable from 01 July 2013 is now to be standardised at €230 per week (from a high rate of €262 per week).

Tax relief on medical insurance premiums is to be capped with the limit to be €1,000 per adult and €500 per child.

The One-Parent tax credit is to be replaced by a Single Person Child Carer Tax Credit with only the principal carer of the child able to claim this credit (as opposed to both parents).

A 2 year Income Tax exemption will be introduced to assist individuals who have been unemployed for at least 15 months start their own unincorporated business.

  • Relief on service charges is being abolished for 2012 and subsequent years.
  • Rent tax relief is being withdrawn on a phased basis and will be abolished in 2018.
 

Hall Street, Kingscourt, Co. Cavan.
Tel: 042 966 5153 | Fax: 042 966 5909

Main Street, Bailieborough, Co. Cavan.
Tel: 042 966 5153 | Fax: 042 966 5909

Chartered Accountants
Registered Auditors
Chartered Tax Advisors
Insolvency Practitioners