How will Budget 2018 Affect my Small Business?

By Register a Company in Ireland, 26th Oct 2017
On the 10th October, Minister Paschal Donohoe set out the first set of budgetary measures from the Irish Government under the leadership of Taoiseach Leo Varadkar. We have picked out 6 of the most prevalent changes affecting small business owners in Ireland.

1. Income Tax

The standard income tax cut-off limit will increase from €33,800 to €34,550 for single individuals, and from €42,800 to €43,550 for married one-earner couples. Income below the threshold is taxable at 20%, any income over is taxed at 40%.

2. Key Employee Engagement Programme or “KEEP”

The Keep programme aims to encourage SME companies to use share options to incentivise employees. The tax is reduced on gains arising from the exercise share options, they will be liable to Capital Gains Tax (CGT) only rather than Income Tax, USC and PRSI.

3. Tourism

The reduced 9% VAT rate for tourism and related activities continues to apply.

4. Construction and Property

Stamp duty on commercial property will increase from 2% to 6%. However, commercial land purchased for housing development will be eligible for a stamp duty refund if development commences within 30 months of purchase and other conditions are met.

5. Food

A package of Brexit response measures includes a Brexit Loan Scheme for SMEs. This scheme will see €300 million available at a competitive rate to SMEs, including food businesses given their unique exposure to the UK market to assist with their working capital needs.

6. Other

On 1 April 2018, a 20-30c per litre tax on sugar-sweetened drinks will be introduced subject to State Aid approval. Duty on 20 packs of cigarettes is to increase by 50c and an additional 25c will apply on loose tobacco.