Budget 2014: the main points

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michael noonan budgetMINISTER for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin have delivered Budget 2014 in the Dáil, with tax measures of €700million announced by the Limerick TD.

Minister Noonan has introduced a home renovation tax incentive scheme, saying: “The Home Renovation Incentive will provide an income tax credit to homeowners who carry out renovation and improvement works on their principal private residences in 2014 and 2015.

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“The Home Renovation Incentive will provide an income tax credit to homeowners who carry out renovation and improvement works on their principal private residences in 2014 and 2015.”

The corporation tax rate will remain at 12.5%, with Minister Noonan declaring himself “100% committed” to maintaining the status quo on this matter. There will also be no change to the tourism and hospitality VAT rate of 9.5%, the Finance Minister stating “it is important that we reinforce success when possible”, despite an expected return to the 13.5% rate. Also in the tourism sector, the air travel tax rate will be reduced to zero from April 1, 2014.

There will be familiar increases on cigarettes and alcohol, with the price of cigarettes and a pint of beer both rising by 10c and a 50c inrease on the price of a 75cl bottle of wine.

Minister Noonan is introducing a Start Your Own Business scheme, which he says will “assist individuals who have been unemployed for at least 15 months start their own unincorporated businesses by giving them a two-year exemption from income tax. This scheme, in combination with the Home Renovation Initiative, will assist construction workers to return to work.”

The 0.6% Pension Levy is to be abolished in December 2014, but there will now be an additional levy on pension funds at 0.15%. There will be no increases in income tax or the Universial Social Charge. Excise duty on petrol and diesel will also remain unchanged.

Minister Howlin announced that children under the age of five will be given free GP care as the first step in a proposed programme to ultimately offer the same to people of all ages.

Other health measures include €25 million from a lowering of the income thresholds for the Over 70s Medical Cards to €900 per week for a couple and €500 for a single person, as well as €30 million for private bed charges in public hospitals.

There will also be €50 million on drugs from generic substitution and reference pricing and €113 million from a review of all medical cards to remove ineligible and redundant cards.

Schools will receive €100 euro per child, and €150 in the case of disadvantaged or DEIS schools, to allow them to establish rental schemes, with a Department of Education document stating that funding for DEIS schools had been protected for this year.

There will be no reduction in basic social welfare rates for people of working age and pensioners and child benefit rates will remain at €130 a month.

The farmers’ flat rate has been increased to 5% from 4.8%, effective as of January 1, 2014. The scheme is intended to compensate farmers for VAT incurred on their agricultural input.