11 Oct 2016
MAIN TAXATION CHANGES AFFECTING FARMERS IN BUDGET 2017Economics, Farm Business & Credit
Take a look at some of the main taxation changes in Budget 2017 and how they will affect you and your farm.
Universal Social Charge
Lowest Universal Social Charge rates will decrease by 0.5% to the rates below:
€0 – €12,012 @ 0.5%
€12,013 – €18,772 @ 2.5%
€18,773 – €70,044 @ 5%
€70,045 – €100,000 @8%
PAYE income in excess of €100,000 @8%
Self employed income in excess of €100,000 @ 11%
Medical card holders and individuals aged 70 and over whose income does not exceed €60,000 will ay a maximum rate of 2.5%
Earned Income Tax Credit
Earned Income Tax Credit to increase from €550 to €940
Income averaging step out
Farmers will be allowed to ‘opt-out’ of income averaging in a single year of unexpectedly poor income and rather than pay the average tax due that year, pay tax only on that year’s income. This measure may be availed of for 2016.
CGT Farm Restructuring Relief
Farm restructuring relief to be extended to end of 2019 with no changes to terms
Farmers’ VAT Flat Rate Addition
Farmers Flat Rate addition to be increased from 5.2% to 5.4% with effect from January 1st 2017.
The flat rate compensates unregistered farmers for VAT incurred on their farming inputs.
Accelerated capital allowances for energy efficient equipment
Scheme of accelerated capital allowances for energy efficient equipment to be made available to sole traders and non-corporates.
Home Carer Tax Credit
Home Carer Tax Credit increased from €1,000 to €1,100
50c increase on packet of 20 cigarettes with effect from midnight tonight
Fuel inputs used to create high efficient electricity in combined heat and power are being fully exempted from carbon tax
CGT relief for raised bogs
Capital Gains Tax relief for sale of raised bogs to be introduced
Capital Acquisitions Tax
Changes to Capital Acquisitions Tax thresholds as follows:
Group A – raised from €280,000 to €310,000
Group B – raised €30,150 to €32,500
Group C – raised from €15,075 to €16,250
Reduced rate of DIRT – to be decreased by 2% each year for the next 4 years until it reaches 33%
CGT Entrepreneur Relief
The rate of CGT on the sale of business is reduced from 20% to 10% for disposals of value up to €1m on qualifying chargeable gains
Relief from Carbon Tax is provided for solid fuels that include a biomass element and for fuel inputs to combined heat and power plants
Help to Buy
A new income tax rebate for first time buyers of new houses is to be introduced, providing a maximum rebate of €20,000