Budget 2014 – What Can We Expect?
Here are a few of the forecasts and predictions (guesses) of what could be in Budget 2014 (It will be announced on October 15th 2013 but most of the changes won’t take effect untul January 1st 2014.)
1) The 9% VAT rate that was implemented to boost the tourism industry is due to expire on the 31st of December 2013. Budget 2014 may confirm it is returning to 13.5%. The rise may be phased in.
2) Income Tax : The government has promised not to increase income tax rates – but there is always scope for a widening of PRSI and USC so that more people pay it on more types of income. A hike in PRSI payments for the self employed in return for welfare protection for long-term injuries or sickness has been mentioned.
3) VRT is another tax where a rise is expected
4) Motor Tax is another candidate for a rise.
5) An increase of DIRT to 35% might also be announced.
6) The rates for CAT (Capital Acquisitions Tax) and CGT (Capital Gains Tax) both now stand at 33% – and an increase to 35% is looking likely . Another option for Minister Noonan might be to raise inheritance tax to 40% whilst maintaining the rate of 33% for gifts bestowed whilst alive .
7) CAT Business Relief currently stands at 90% but Budget 2014 could see a reduction of this relief to 75%.
8) Pensions Tax Relief : There is a possibility of lowering the maximum tax free pension lump sum available at retirement (currently €200,000).There may also be a new pension levy to meet the costs of supporting insolvent pension schemes.
9) Alcohol duty was increased in Budget 2013 – after several years of no change. Another increase in Budget 2014 would not come as a surprise. An increase in tobacco duty is also likely.
10) Welfare: There are definitely going to be cuts in overall welfare spending in Budget 2014. The “core” weekly rates may not go down but savings will be made by changing eligibility rules or by cutting the length of payment periods.
There may well be reductions in benefits for longer term unemployed and younger unemployed.
Changes to FIS might be made so that it is easier for people working over 19 hours a week to claim it.
Changes to rent allowance may also be confirmed that will allow working people to get help with rent payments thus removing poverty traps and encouraging people to work.
No Changes are expected to the 12.5% corporation tax rate.
Property Tax rates will not be changed in Budget 2014.