Welcome to our big budget breakdown. 

The time has come for the Government to pay us back and reveal what our taxes are buying us these days. Highly anticipated and coming in at an almighty €11 billion– the largest ever package for spending and tax cuts – the 2023 budget is heavily focused on tackling rises in cost of living. 

We’re aware these things can get overwhelming and with so many figures hopping around, it’s no easy feat making head nor tail of the details. That’s why we’re breaking it down for you and pulling out the nuggets you need to be aware of to make sure you’re helping yourself and your business in the best possible way. 

Let’s get started, shall we?

The total package 

The €11 billion budget places a large emphasis on the cost of living crisis, setting aside a €4.1 billion package to tackle it. That leaves €6.9 billion to pay for core budget measures. 

Cost to families 

• 25 percent reduction in childcare fees 

• Funding for free school books to all primary school children 

• Income up to €40,000 will now be taxed at the lower rate (20 per cent), up from the previous €36,800 threshold this brings a saving to the individual of up to €640
• The student contribution for third-level education will be reduced by €1,000 for the 2022/2023 academic year
• A permanent reduction in third level fees of €500 will take effect for households earning between €62,000-€100,000 next year

Health is wealth, or is it?

• Removal of hospital inpatient charges for all 

• Free GP care for over 400,000 people on or below the median income 

• Free contraception for all women aged 16-30 with the promise of funding for IVF treatment

• The ongoing response to Covid-19 will be given a further €439 million

Social Welfare 

• Personal, Employee and Earned income tax credits are each to increase by €75 to €1775 resulting in a saving of up to €150

• The second USC band is to increase by €1,625 which equates to a saving of €40.62

• Weekly social welfare rates will increase by €12, while a double payment will be paid in October.
• This year there will be a Christmas Bonus and those in receipt of the Working Family Payment, Cost of Disability Payment will receive a €500 once-off payment
• Carers will receive a once-off €500 payment and eligibility for the Fuel Allowance will be expanded for the winter months

Getting down to business 

• The Small Benefit Limit (more commonly known as the ‘One4All vouchers’) has been doubled to €1,000 and may now be granted in two installments (this was previously restricted to a one-off payment).  This change which will be effective immediately
• The hospitality VAT rate of 9 percent will expire in February 2023 and these businesses will revert to the 13.5 percent VAT rate at that point
• Temporary Business Energy Support Schemes (TBESS) will provide businesses with up to €10,000 per month backdated to September and continuing until Spring 2023. The scheme will support eligible business, covering 40 percent of the increase in their energy bills where the unit price has increased by 50 percent or more (2021 versus 2022)
• For those in the construction industry a 10 percent levy on the cost of some concrete products at point of first supply is not good news

Housing & Rent 

• A one-off tax credit of €1,000 over two years (2022 and 2023) has been introduced for renters. While small, it is a direct reduction in tax so therefore puts money in your hand.
• A tax is to be levied on vacant properties at a rate of three times the Local Property Tax liability. This will apply to properties which are occupied for less than 30 days in a 12 month period, however, there will be some allowance for short term vacancies where:

• The property was recently sold or is currently listed for sale or rent
• The property is vacant due to the occupiers illness or long term care
• The property is vacant as a result of significant refurbishment work

• The Help to Buy scheme will be extended until the end of 2024
• Funding was announced to deliver 9,100 new-build social homes, 5,500 new affordable homes for sale and rent, and 6,500 new social homes

Transport & energy caps 

• Another energy credit for hard pressed household of €600, €200 before Christmas and a further two tranches of €200 will be delivered in the new year
• An extra 2 cents in carbon tax on fuel costs will be offset by a reduction in the Oil Reserve Levy which is expected to be passed on to the consumer resulting in a net nil impact to the consumer
• Excise duty on fuel will remain unchanged, while the reduced VAT rate for energy of 9 percent will stay put until February 28th, 2023
• Fuel Allowance will be increased and a scheme is set to be expanded to increase eligibility

Other highlights 

• VAT on newspapers (including digital format) to be reduced from 9 percent to zero percent from January 2023
• Excise duty on Cigarettes up 50 cents on a pack of 20
• Zero VAT rates to be applied to hormone replacement, nicotine replacement and period products 

If you think your business could be affected by these changes and are worried about what the future could hold, then get in touch and let’s see how we can work together to continue your company’s success.