Budget Presentation


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Presentation from CXC/NRF "Morning after the budget briefing"

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Budget Presentation

  1. 1. Cork Airport Business Park Cork 28 Merrion Square, Dublin 2 Budget 2011 Kieran Coughlan Tax Manager
  2. 2. Budget 2011 Expenditure Cuts <ul><li>Expenditure Cuts – Headline Issues </li></ul><ul><li>Education </li></ul><ul><li>Higher Education – student contribution to be increased by €250 </li></ul><ul><li>Grants for post graduate courses to be withdrawn </li></ul><ul><li>Contribution for school bus to increase from €50 to €100 </li></ul><ul><li>Introduction of capital asset test for student grants from 2013 </li></ul><ul><li>Health issues </li></ul><ul><li>Monthly personal contribution for drugs increased from €120 to €132 </li></ul><ul><li>Contribution by private health insurers to increase, health insurance costs likely to increase as a result </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  3. 3. Budget 2011 Expenditure Cuts <ul><li>Company Issues </li></ul><ul><li>Rebate for redundancy be reduced 60% to 15% </li></ul><ul><li>Social Welfare </li></ul><ul><li>Child benefit amounts to be standardised for all children over next two years, in 2012 payments to third and fourth children to be reduced by €19 & €17 per month </li></ul><ul><li>Jobseekers benefit will be based on 5 day week rather than 6 day week – negative effect for those taking up part time employment </li></ul><ul><li>Fuel allowance reduced from 32 weeks to 26 weeks </li></ul><ul><li>Personal contributions towards rent supplement to be increased </li></ul><ul><li>Back to school clothing and foot-ware allowance to be reduced </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  4. 4. Budget 2011 Expenditure Cuts <ul><li>Social Welfare </li></ul><ul><li>One parent family payments to be phased out where youngest child reaches the age of 7 (after 2014) </li></ul><ul><li>Reform of child benefit, statutory sick pay and consolidation of means tested schemes still on the agenda. </li></ul><ul><li>Reduction in rates of State Pension flagged from September 2012 where full social insurance record not in place. </li></ul><ul><li>Reduction in mortgage interest supplement </li></ul><ul><li>Withdrawal of disability benefit in cases where disability less than 15% </li></ul><ul><li>Reduction in disability benefit down to jobseekers benefit levels </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  5. 5. Effect of expenditure cuts on RECRUITMENT <ul><li>Mixed messages </li></ul><ul><li>Harder for those getting back to part time employment </li></ul><ul><li>Very minor changes for those who choose social welfare “as a lifestyle choice” </li></ul><ul><li>Changes to redundancy rebate likely to bring forward some redundancies </li></ul><ul><li>Employers more likely to want contract/contractor employees </li></ul><ul><li>Cost of Agencies keeping staff for more than 2 years increased by €540 per year! </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  6. 6. Tax Changes for employees <ul><li>Positives + </li></ul><ul><li>No change to income tax, PRSI </li></ul><ul><li>Low earners will be exempted from USC (below €10,036) </li></ul><ul><li>No change to tax deductibility of pensions </li></ul><ul><li>Increase in mortgage interest relief for first time buyers who bought in the period 2004 to 2008 </li></ul><ul><li>Incentive for those to buy between now and end of 2012 </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  7. 7. Tax Changes for employees <ul><li>Negatives - </li></ul><ul><li>Increase in VAT on “luxury goods” from 21% to 23% </li></ul><ul><li>Household charge of €100 to be paid by 31 March 2012 </li></ul><ul><li>Increase in motor tax </li></ul><ul><li>Increase in carbon tax (fuel and heating) </li></ul><ul><li>Increase in Cigarettes 25c </li></ul><ul><li>Withdrawal of exemption from tax for first 6 weeks of Illness benefit </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  8. 8. Tax Changes for companies <ul><li>Positives + </li></ul><ul><li>Reaffirming of Corporation Tax at 12.5% </li></ul><ul><li>“ Assignee” relief to be introduced </li></ul><ul><li>Exemption from corporation tax for start up companies extended for another 3 years (only applies to trading companies) </li></ul><ul><li>Blanket R&D tax credit available where expenditure less than €100,000 </li></ul><ul><li>Micro finance loan guarantee for new startups </li></ul><ul><li>Negatives – </li></ul><ul><li>Reduction in employers PRSI relief for employee pension contributions </li></ul><ul><li>Rebate for redundancy reduced from 60% to 15% </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  9. 9. Tax changes for property investors <ul><li>Positives + </li></ul><ul><li>No change to tax deductibility of mortgage interest </li></ul><ul><li>Section 23 type allowances to be phased out in 2014/2015, no changes for most investors in 2012 or 2013 </li></ul><ul><li>Capital Gains Tax exemption for investing between now and end of 2013 if asset held for 7 years </li></ul><ul><li>Stamp duty on purchase of commercial property now down to 2% from 6% </li></ul><ul><li>Negatives - </li></ul><ul><li>Surcharge of 5% for those with rents over €100,000 using Section 23 type relief </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  10. 10. Tax changes on wealth <ul><li>Negatives - </li></ul><ul><li>Capital Gains Tax increased to 30% from 25% </li></ul><ul><li>Gift/Inheritance Tax increased to 30% from 25% </li></ul><ul><li>Lifetime tax free limit for transfers from parent to child reduced to €250,000 </li></ul><ul><li>Increase in DIRT from 27% to 30% </li></ul><ul><li>30% tax on passing of remainder of pension on death to child (up from 20%) </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  11. 11. Effect of tax changes on RECRUITMENT <ul><li>No significant changes to takehome pay for you or your clients </li></ul><ul><li>New “Special Assignee Relief Programme” to extend tax break to highly skilled persons relocating to Ireland </li></ul><ul><li>“ Foreign Earnings Deduction” for persons sent on temporary assignment to BRIC countries </li></ul><ul><li>Benefits on contracting remain as good as they have always been </li></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>
  12. 12. About CXC <ul><li>Offices throughout the World in over 15 countries </li></ul><ul><li>Market Leaders for Accounting Services to Contractors </li></ul><ul><li>Established in Ireland since 2001 </li></ul><ul><li>Over 2500 Contractors in Ireland and abroad </li></ul><ul><li>Managed by Professional Accountants </li></ul><ul><li>Staff of over 35 Professionals to assist you </li></ul>
  13. 13. <ul><ul><li> “ Alone we do so little, together we can do so much” </li></ul></ul><ul><ul><li>( Helen Keller ) </li></ul></ul><ul><li>CXC the Professionals for Contractor Services </li></ul>