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.

17 thoughts on “Budget 2018 – What we Know So Far

  1. Dear Arnold Devine,
    You must be living in a dream world, there isn’t an adult or child in this country who doesn’t contribute to the exchequer.
    To make my point check out the VAT Rate on sweets and Ice cream for starters and the taxes that KIDS are paying on their way home from school. Welfare or not we are all paying VAT, Waste, Property Tax and the list goes on and on and on………………Wake up Kiddo open your eyes. I hope you never have to try to survive on some of the welfare payments in this country.

  2. What about childcare? Are they gonna increase or no? It’s not enough 140 euro pet month to pay 1000 for creche…..😣😣😣it’s a shame to Ireland….

  3. What about the senior citizens upper earning limit of €38,000 which was dispensed with and now seem conveniently forgotten?

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