IT WAS JUST three months ago that Paschal Donohoe stood up in the Dáil to deliver his second Budget as Minister for Finance.

The headline announcements include changes to the entry point for the higher rate of income tax, an increase in VAT for hotels, a new parental leave scheme and a rise in the price of cigarettes.

Measures such as the increase in cigarettes took effect from 9 October, but many more haven’t come into effect until today.

Here’s what you need to know:

Taxation

The most direct impact on your pocket will come in the form of changes to income tax and the Universal Social Charge (USC).

For this year, the entry point to the higher rate of income tax for all earners has increased by €750, to €35,300 for a single worker.

For married one-earner couples, this will increase from €42,550 to €44,300.

There will also be an increase in the Home Carer Tax Credit from €1,200 to €1,500.

Donohoe delivered the Budget on 9 October Sam Boal / Rollingnews.ie Sam Boal / Rollingnews.ie / Rollingnews.ie

Similarly, there’s an increase in the Earned Income Credit from €1,150 to €1,350.

From today, there’ll be a €502 increase to the €19,372 band ceiling for the USC.

There’ll also be a reduction in the 4.75% rate that applies to a large number of workers to 4.5%.

As the minimum wage is also rising from €9.55 to €9.80, this amendment to the band ceiling will ensure those on minimum wage remain outside the higher rates of USC.

Here are the rates and bands from today onwards:

• €0 – €12,012 @ 0.5%
• €12,012 – €19,874 @ 2%
• €19,874 – €70,044 @ 4.5%
• €70,044+ @8%

So, if you earn €30,000, you’ll have an extra €39 in your pocket this year. 

If you earn €40,000, your savings will be €214. For those earning €50,000, the savings will be €239. 

On the higher end of the scale, there will be €290 savings for people earning €100,000.

VRT

A 1% vehicle registration tax surcharge is being brought in for diesel engine passenger vehicles registered in Ireland from today onwards.

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VAT

The 9% VAT rate for hotels, restaurants and hairdressing will be increased to 13.5% from today.

The VAT on e-books and electronically supplied newspapers is being reduced from 23% to 9% from today onwards, however.

Betting tax

Betting duty is also set to increase from today, from 15% to 25% on the commission earned by betting intermediaries and exchanges.

Landlords

Landlords will now be entitled to relief of up to 100% of the interest paid on loans for the purchase or refurbishment of residential property from today.

Employers

The weekly threshold for the higher rate of employer’s PRSI is taking effect today, increasing from €376 to €386.

There’s also a 1% increase in the National Training Fund Levy payable by employers in respect of earnings of employees in Class A and Class H employments.

What’s happening later in the year?

A lot of the measures announced in Budget 2019 outlined spending in key areas, but not all had clear timelines attached.

Here are a few things that we know are happening within the coming months:

• From November 2019, a new paid parental leave scheme will be introduced to provide two extra weeks’ leave to every parent of a child in their first year. You’ll find more detail on the leave scheme here.
• In March, all weekly social welfare payments will increase by €5.
• Also in March, the earnings disregard for the One Parent Family Payment will be increased, while a maintenance disregard will be introduced for the working family payment. 
• Payable prior to the beginning of the next school year, there will be a €25 increase in back to school clothing and footwear allowances.
• As per the green public transport fund, Ireland will no longer purchase diesel-only buses for the urban PSO bus fleets after July.

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