Tag Archive for: budget 2024

Increased Cost of Business Grant

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Increased Cost of Business Grant

As part of Budget 2024, the government signed off on a package of €257 million for the Increased Cost of Business (ICOB) Grant to support small and medium sized businesses. It is intended to contribute towards the risings costs faced by businesses. However, it is not a Commercial Rates waiver; businesses are still required to pay rates to their local authority.

What is the grant amount?

The grant amount is based on the value of the Commercial Rates bill received by an eligible business in 2023.

  1. For qualifying businesses with a 2023 Commercial Rate bill of less than €10,000, the ICOB grant will be paid at a rate of 50% of the business’s Commercial Rate bill for 2023.
  2. For qualifying businesses with a 2023 Commercial Rate bill of between €10,000 and €30,000, the ICOB grant will be €5,000.
  3. Businesses with a 2023 Commercial Rates bill of greater than €30,000 are not eligible to receive an ICOB grant.

Who is eligible for the ICOB Grant?

The following are the main qualifying criteria:

  • Commercial Rates Bill must be equal to or less than €30,000 in 2023.
  • Business must currently operate from a property that is commercially rateable.
  • Business must have been trading on 1 February 2024, and intend to continue trading for at least three months.
  • Business must be rates compliant, (businesses with approved performing payment plans may be deemed compliant).
  • Business must be tax compliant and possess a valid Tax Registration Number (TRN).
  • Business must provide confirmation of bank details.
  • If your business operated from a property subject to a Property Entry Levy (PEL) in 2023, you are eligible to receive the grant based on the annualised (grossed-up) value of the PEL bill issued for that property.

Who is not eligible for the ICOB Grant?

  • Public institutions and financial institutions (with exceptions for Credit Unions and specific post office services, excluding Company Post Offices).
  • Vacant properties.

How can I apply?

Businesses are encouraged to use the ICOB portal.

The closing date for businesses to confirm eligibility and to upload verification details will be 1 May 2024. Payments will commence in late April 2024.

If you require assistance with your application for this grant, please contact Carol Hartnett from our Accounting & Financial Advisory Department.

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Budget 2024 Analysis

Budget 2024 Highlights

Delivering a €14bn Budget package, Minister McGrath described Budget 2024 as a ‘’step change” in planning for the future. As we have navigated through unprecedented challenges – the pandemic, Brexit, the war in Ukraine, and rates of inflation not seen for some 40 years, the Irish economy made a strong rebound in the past 12 months.

However, the continued effects of inflation, capacity constraints in the housing and labour markets and the current cost of living crisis have resulted in a deterioration of living standards for individuals, families and businesses for which today’s Budget contained immediate once-off supports aimed to respond to the acute needs of those who need it the most.

While Ireland continues to generate strong tax receipts, for the first time in several years there is a downward revision for 2023 as compared to earlier projections, which will continue into next year. Whilst the Minister welcomed a projected Government surplus of €8.8 billion for next year, it was acknowledged that our tax receipts must be used wisely to deliver a comprehensive set of financial supports and set the scene for significant future investments in public services such as housing, health, education and transport.

Income tax changes were mainly limited to a threshold increase to €42,000, above which the higher 40% rate of tax would apply, small increases to the main income tax credits and USC rates.

Whilst the Minister confirmed that we will keep our attractive 12.5% corporation tax rate, today’s Budget is set to make a fundamental change in global tax policy with the introduction of a new 15% minimum tax rate for large companies as provided for under the OECD Pillar Two Agreement.  This is a once-in-a-generation reform to our corporation tax system, and marks the culmination of a ten-year, global project to reform the taxation of multi-national enterprises.

For the SME sector, we see positive enhancements made to The Employment Investment Incentive Scheme (EII) and the introduction of a new targeted capital gains tax rate of 16% for angel investors when disposing of qualifying investment. The changes will help encourage investment in innovative start-up SME’s and unlock more equity investment in smaller, early stage, businesses that are typically most in need of funding.

The extension of the R&D Tax Credit regime, with an increased tax credit from 25% to 30% is welcomed as Ireland aims to stay competitive in the FDI space.

What was significant though was the Minister’s reference to a “future-proof” of public finances by establishing two new funds to save for future generations. The larger of the funds is the Future Ireland Fund, set to grow to €100 billion by 2035, to assist with paying for the additional health and pension costs associated with Ireland’s ageing population.

The government will also establish a second, smaller €14 billion infrastructure and climate fund, available to catch up on targets to cut greenhouse gas emissions and act as a buffer against capital spending cuts in any future downturn.

It is likely that the one-off support measures will grab the media headlines. However, it is the discussions and outcomes around the changing future tax base to enable us to fund public services and put in place a long-term plan that will make the economic future safer for all.

View the Budget 2024 highlights here.

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Budget 2024 Highlights

Budget 2024 Highlights

Minister for Finance, Michael McGrath delivered the final Budget today, 10 October 2023. Below we outline the highlights of Budget 2024.

Personal Tax
  • Income tax standard rate bands increase by €2,000 to €42,000 (single person), with the married single earner band increasing to €51,000.
  • Personal, PAYE, Earned Tax credits to increase by €100 to €1,875.
  • Home Carer Tax Credit will increase by €100 to €1,800.
  • Incapacitated Child Tax Credit to increase to €3,500.
  • Small change to the second rate-band of Universal Social Charge which will increase from €22,920 to €25,760. The 4.5% rate is reducing to 4% from 1 January 2024.
  • Increase in the exemption from Income Tax, USC and PRSI to €400 on profits arising from domestic microgeneration of electricity which is supplied to the grid.
Enterprise/SMEs/Agri-sector
  • Introduction of 15% Corporation Tax rate, under the OECD Pillar Two agreement, on trading profits of large companies. SME sector unaffected. Further details to be announced in the Finance Bill.
  • Capital Gains Tax relief for Angel Investment in innovative start-ups. Qualifying investments will be certified by Enterprise Ireland with a minimum investment in new shares of at least €10,000. Relief will apply if shares are held for at least 3 years. A reduced rate of Capital Gains Tax of 16% will apply on a gain of up to twice the initial investment. A lifetime limit of €3m will apply to the relief.
  • From 1 January 2025 the upper levels of Retirement Relief will apply on disposals to children and to others between the ages of 55 and 70. A €10m limit will be introduced for disposals to a child up to the age of 70.
  • With effect from 1 January 2024 the minimum holding period of investment to claim relief under the Employment Investment Incentive (EII) scheme is being standardised at 4 years with the limit on such investments being increased to €500,000. Further changes to EII will be set out in the Finance Bill.
  • The rate of the Research & Development Tax Credit is being increased to 30% in respect of 2024 expenditure. The first-year payment threshold, which allows for a claim to be repaid in full rather than spread over 3 years, is being increased to €50,000.
  • Section 481 Film Relief investment cap being increased to €125m.
  • Accelerated capital allowances for energy efficient equipment are to be extended for a further two years to the end of 2025.
  • Accelerated capital allowances for farm safety equipment are to be extended to 31 December 2026.
  • Stamp Duty Consanguinity relief which reduces the duty applicable on transfer of farmland between family members from 7.5% to 1% is being extended to 31 December 2028.
  • The threshold for Stock Relief for registered farm partnerships is increasing to €20,000, while the aggregate lifetime limit of stamp duty relief for young trained farmers is being increased to €100,000 from 1 January 2024.
Housing/Cost of Living Measures
  • The Rent Tax Credit is being increased to €750. The tax credit will also be extended to parents paying their children’s rental costs while in third level education in the case of Rent-a-Room accommodation or “digs”.
  • A new Rented Residential Relief is being introduced for Landlords. The relief will be granted at the standard rate of tax and will be as follows; €3,000 in 2024; €4,000 in 2025; and €5,000 in 2026 and 2027. The tenancy must be registered to the PRTB, or the property let to a Local Authority. The value of the relief will be €600 to €1,000. The relief will be clawed back if the property does not remain in the rental market for the 4 years.
  • The Help to Buy (HTB) scheme is being extended to the end of 2025. Amendments are being made to the scheme to enable contributions through the Local Authority Affordable Purchase scheme to be considered when calculating the 70% loan-to-value requirement.
  • A temporary one-year Mortgage Interest Tax relief of up to €1,250 is being introduced for homeowners on variable or tracker mortgages with outstanding mortgage of between €80,000 and €500,000 on the 31 December 2022 and fully LPT compliant. Relief will be at the standard rate on the interest rate increases between 2022 and 2023. The relief will be claimed on filing a tax return for 2023.
  • The rate of the Vacant Homes Tax is being increased with effect from 1 November 2023 to 5 times the property’s existing LPT liability.
 VAT
  • The registration thresholds are being slightly increased to €40,000 for the supply of services and €80,000 for the supply of goods from 1 January 2024.
  • From 1 January 2024 the rate of VAT on audiobooks and eBooks will be reduced to 0%.
  • The 9% VAT rate for Gas and Electricity supplies is being extended to 31 October 2024.
  • The supply and installation of solar panels in schools is being reduced to 0% from 1 January 2024.
  • The Farming VAT flat rate is being reduced to 4.8% from 1 January 2024.
 Other Measures
  • The fund for the Charites VAT Compensation Scheme is being increased from €5m to €10m.
  • The aggregate value of items donated in a year under the Heritage Donation scheme to be increased from €6m to €8m.
  • The tapering relief applied to benefit in kind on battery electric vehicles is being enhanced so that the current Original Market Value deduction of €35,000 remains until 2025 followed by €20,000 in 2026 and €10,000 in 2027. The universal relief of €10,000 to the OMV is being extended for a further year to end 2024.

Read our tax team’s analysis of Budget 2024.

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