Budget 2018 – What we Know So Far

Budget 2018 is due to be announced on Tuesday October 10th 2017.

The 2018 Budget will be overseen by the new Finance Minister Paschal Donohoe , who was appointed in June.

The government estimate , back in Feb 2017 , of the net “fiscal space” available for Budget 2018 was  €1.2 billion. But , whilst Budget 2018 is expected to allow for at least a  €1.2 billion “adjustment ” , the real room for manoeuvre could be as little as €300 million because of the carry over effects of some measures from Budget 2017.

In a speech on June 28th , Taoiseach Leo Varadkar pointed out that there is a  need to review existing spending programmes and if just 1% or 2% of the  €53 billion state expenditure could be re-allocated we would have another billion to use.  He called this the  hidden ‘fiscal space’.

What can we expect to be announced  in Budget 2018 ?

It’s getting closer   and here is our list pf some of the possibilites for Budget 2018

 

USC reductions – with possible balancing income tax increases for higher earners.   There could be the start of kind of  merger of the USC and pay-related social insurance (PRSI)  – which might mean more people paying PRSI but less paying USC.

USC for over 70’s – a decision will need to be made about the current reduced rate of USC . It will either be extended past it’s current end date of 2017 or allowed to end.

Income Tax – Currently, PAYE workers pay the higher rate of 40pc when their earnings reach €33,800.  There is the possibility of this threshold being increased.  An increase to €34,800 would cost €178m.
Reducing the 20% standard income tax  rate to 19%  might also be an option – this is estimated to cost about  €580 million.

Income tax bands have not changed since 2015 – so thery could be increased which would mean cuts in Income Tax .

Medical Cards :  Health Minister Simon Harris has hinted at a widening of the eligibility for medical cards – or at least GP visit cards. This might involve a raising of the income thresholds.

Further income tax reductions for the self employed by increasing the “Earned Income Credit” by at least €350.

Mortgage Interest Relief – we expect to hear details of how this will be extended for current recipients beyond the current 2017 end date.

Diesel : There will probably be a phased  increase on the excise duty  on Diesel to gradually bring it in line with petrol . This could increase the price by as much as 3c a litre in 2018.

A 2% cut to DIRT  – (as promised in Budget 2017)

Sugar Tax details are expected to be announced for the sugar tax to begin in  2018

Corporation Tax – No change from the current 12.5%

School Transport – possible changes to bus fares .

Welfare and Pensions
There will probably be small increases to pensions and benefits across the board.
A restoration  of the telephone allowance is also a possibility.
A new Working Family Payment was promised back in 2016 – so we finally expect to hear some details about this in Budget 2108

Land tax on vacant sites could be introduced to encourage house building.

Incentives for landlords – such as restoring the 100% mortgage interest deductibility  or simplifying tax rules on rental properties.

Possible Tax Incentives to encourage the building of affordable housing.

VAT – the IMF have suggested increasing VAT on items that are currently lower rated for VAT. Retailers are asking for a cut of 3% to the standard VAT rate. Maybe we will get both?

Property Tax – this could be increased ; it has remained the same since it’s introduction. (The IMF have suggested it could be increased). The planned revaluation date is 2019 .

VRT relief on electric cars – the €5000 cap on VAT relief might be increased or even removed .

Student Loans – this has been on the back burner for a couple of years. Maybe 2018 is the year it begins?

Updated Sept 18th

We will keep this page updated with any Budget 2018 related news as we hear about it.

 

Euro Sterling Exchange Rate Update

Euro Sterling Exchange Rate  : September 18th  2017 11am

1 GBP = 1.135 EUR
1 EUR = 0.88 GBP

See Latest  Exchange Rates Here

In the first three weeks of September we  have seen a gradual recovery in the value of the Pound against the Euro. This recovery  sped up on Thursday 15th when  the Bank of England’s Marc Carney  said that the Bank of England was considering raising interest rates. The Pound hit a  a two-month high against the Euro on Friday 15th.

Four months ago a  Euro was worth  just £0.8453 GBP.  Today , the Sterling to Euro exchange rate is closer to  £0.88 GBP .
The euro’s recent rise against sterling illustrates the diverging economic fortunes of Britain and the eurozone since the Brexit vote. While the Eurozone prospers – growth in Q2 exceeded expectations and ran at an annualised rate of 2.2% – the UK’s currency is weak, growth is subdued and virtually all risks to the economic outlook are to the downside.

Last month , US investment bank , Morgan Stanley , predicted Euro/ Sterling parity in 2018 – with the possibillity of the Euro being worth more than the Pound at some stage in early 2018.

This week HSBC Bank have upgraded their forecast for the British Pound. Their previous forecast of a  Sterling-Euro parity in late 2017  made the bank the most pessimistic in the institutional community where the median forecast is €1.12 to the POund for year-end 2017.

With so much  uncertainty in the currency markets at the moment –  it could get very stressful for people or businesses planning large Euro / Sterling exchanges in the next few months.   We are likely to be entering a period of heightened volatility which, depending on your timescales and budget, could cause problems if you are not properly prepared.

Using a Currency Exchange specialist  can remove some of the uncertainty by allowing you to fix an exchange rate as much as 12 months in advance of your transfer.  For good deals on large amounts of currency exchange –  for personal money or  for businesses – see our page on how to get the Best Exchange Rates

You might also be interested in this information about Transferring  Money from Ireland to a UK Bank

If you are just looking to buy some Pounds , Dollars  or other foreign cash for a holiday  – take a look at our page about the best place to buy travel currency in Ireland

 

euro sterling exchange rate ireland

 

Marks and Spencer Discount Code

 Marks and Spencer Ireland    have an online discount code that will get you 20% off Clothing, Shoes and Homeware  :  To claim your discount, copy the code below and paste at your checkout online.   Offer ends 18th Sept   .  The code is  SEP15FF

EXCLUDES: schoolwear, branded lighting

Free delivery on orders over €30

At the MarksandSpencer.ie  website you can’t buy food (usually)   or  furniture – but there is a wide choice of clothing for all ages and  some great stuff for the home – towels, bed linen , luggage,cookware, and other homeware items.
marksandspencer.ie discounts

Check out more online discounts , offers and deals on our Bargain Alerts Page .

Credit cards with a billing address outside Ireland are not accepted – so that means people abroad can’t use the Irish M&S site to buy gifts for people in Ireland.

If you want to get items delivered to someone in the UK or overseas you can’t do it on the Irish M&S site – but international delivery is available on the M&S UK Site
Shoppers on the UK site still can’t get orders delivered to Ireland though.

Marks and Spencer Ireland

See more Online shops delivering to Ireland

 

Pre Paid Electricity Meters

There has been an increase in the use of prepay meters for electricty in Ireland. The two companies that only offer prepay meters have seen an increase in customers in the past 2 years.

The idea of pre payment was initially  aimed at people on lower incomes who may struggle to budget for large bills. With a pre pay meter you can only use the electricity you have paid for – so it is easier to control the usage.  (Pre paid meters are sometimes  called key meters or card meters.).
Some people choose to have them – thinking it will help cut costs.
Many landlords also  seem to  like the idea of pre pay meters for their rental properties – so they don’t have any worries about outstanding electricity bills for tenants.

Most of the major providers will usually try and make customers get prepay meters installed if they are in large amounts of arrears . This is to help stop the arrears increasing any more.  (Installation is free in these cases).

Most of the electricity suppliers (Electric Ireland, Energia . SSE Airtricity, Bord Gais Energy ) should  install a pre-pay electricity meter for any customer that requests it – but there is normally a charge for it if the customer is requesting it . (At least €100) .
Normally – when you are on a pre-payment meter you will be put on the suppliers  highest tariff.  But if you are using a standard meter you will be able to get a wider choice of tariffs, including cheap introductory online deals, direct debit discounts and more.

Pre Payment is made usually by the use of a card which can be topped up at many shops or over the phone with debit cards or credit cards.
The pay as you go meters usually allow some emergency supply to continue even if the credit runs out . For example – if a customer runs out of credit  Mon-Thurs: after 4pm the supply will not cut off until  9am the following day. At weekends – if the credit runs out between 4pm Friday and 9am Monday – the power will not cut off until 9am Monday.
The cost of any power used after the credit ran out will be deducted from the next top up.
Landlords  find pre pay meters are useful for rented properties – it helps avoid the problems of large unpaid bills. The tenants might not be so happy with the idea though !

There are companies  that specialise in pre-paid electricity ( Prepay Power and Pinergy ) They will install a meter for free if you switch to them as your electricity supplier.


How Much Extra Does Pre-paid  Electricity Cost ?


Pinergy : The basic unit rate they  charge is the same as the Electric Ireland “Standard Rate” (which is their highest rate) – BUT they also add on an annual service charge of just under €137 on top of the standing charge of €146.  So that means someone using Pinergy who consumed 4200kwh a year of electricity would end up paying  €1107 a year with a prepay meter.  The same usage would work out at  just €773 if they switched to  the current cheapest cashback deal from Energia   That’s a difference of  €334 a year (more than 25%) . For people on low incomes – that is a very significant amount.

PrePay Power charge a slightly lower unit rate than Pinergy but a slightly higher standing charge (€159) . Using 4200 kwh in  a year with them would cost €1114.

Flogas and PrePay Power also do pre pay meters for gas

See more details here of the Lowest Electricity Prices

The use of prepay meters might encourage people to use less electricity – (especially if they keep running out of credit !)   But – in our opinion – for most people ,  it makes more sense to switch to the lowest priced electricity supplier if possible – and then also be pro-active about cutting down your electricity usage rather than getting a prepaid electric meter installed.

Of course in rented property , if you landlord has installed a pre-pay meter you may have no choice sadly.