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Budget 2023

Budget 2023

The business world is emerging from the worst of the COVID-19 pandemic. With inflation running at 8.5%, we now face sizeable economic challenges. We have all seen the huge increases in the cost of energy which is leading to a cost of living crisis.

So what has the 2023 budget done to assist?

For Businesses

12% Corporation Tax rate to remain for SME’s – No change from last year.

Businesses with a turnover of less than €750m will retain the low corporation tax rate and this will increase to 15% for those with turnover above this.

Temporary Business Energy Support Scheme (T-BESS) to help certain trading businesses with energy costs. If the business has experienced a 50% increase in the average unit price for the relevant period in 2022 compared with 2021.

The support will equal 40% of the amount of the increase in the bill subject to a monthly cap of €10,000 and an overall cap yet to announced.

9% VAT Rate

The 9 per cent Vat rate for the hospitality sector has been retained until end of February next year.

Growth and Sustainability Loan Scheme

A new longer-term low-cost loan of up to €500,000 for up to 10 years, to help Small and Medium Enterprises (SMEs) including farmers and fishers to expand or invest in sustainability or energy efficiency.

Research and Development (R&D)

Research and Development (R&D) tax credit payment changes to align it with new international definitions of refundable tax credits

Small Firms Investment in Energy Efficiency Scheme

A new grant to be provided through Local Enterprise Offices to help micro-enterprises to reduce their carbon footprint and energy costs.

Night-time economy

The cost of applying for a Special Exemption Order for late night opening for bars and nightclubs will decrease from €110 to €55. The measure will be implemented from midnight on 27 September 2022.

For Employees

An expansion of the lower rate is a positive one but this third rate being proposed could be one to watch out for. The headline changes are as follows:

The Standard rate bands to be increased by €3,200 to €40,000 for a single person.

Personal tax, employee tax and earned income tax credits increased by €50 (from €1,700 to €1,775).

2% USC rate band to be increased from €21,295 to €22,920.

Minimum wage up 80c to €11.30

Small Benefit Exemption will increase from €500 to €1,000. Employers can give 2 vouchers or gifts to employees each tax year. This increase will also apply for the 2022 tax year.

Rent Tax Credit for private rented accommodation, you can claim a new Rent Tax Credit of €500 a year for 2022 and each subsequent year.

Introduction of a third rate of income tax – Not confirmed but further analysis to be undertaken…

For Employees with young children – National Childcare Scheme – this should result in up to €175 a month savings for parents in 2023.

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