That aside, I will focus on the tax and business end of the Budget 2016 in this summary.

It must be noted that the full details will only be available in the Finance Act

INCOME TAX CHANGES

Universal Social Charge (USC)

Reducing Income Tax to below 50% (to 49.5%)

Basically the USC was reduced by 1.5%. The entry point is increased to €13,000.

The 1.5% rate of USC down 1.0%
The 3.5% rate of USC down to 3.0%, threshold increased to €18,668
The 7% rate of USC will be reduced to 5.5%, threshold – €70,044

People earning over €70,000 will benefit but will not get a reduction on tax on earnings over €70,000

Tax Credits

A Self Employed tax credit of €550 for self-employed earners in lieu of the PAYE tax credit of €1,650 which they are not entitled to. This is an attempt to close the difference in credits allowed for employees versus self-employed.
Home Carers credit up €190 to €1,000 per year.
Up to €5,000 tax credit for farmers – to assist with succession of farms for family partnerships for five years.

PRSI

A ‘Tapered PRSI credit’ up to €624 per annum for employees so it appears that self-employed will not get such benefit

OTHER TAX CHANGES

Capital Acquisitions Tax (Inheritances / Gifts)

Increase of Group A Threshold from €225,000 to €280,000

This means up to €280k of valued of assets can be received from a Parent in a persons lifetime. A good increase but let it be noted that it was over €500,000 in ‘boom’ times.

Other groups seem to remain unchanged

Capital Gains Tax

Capital gains tax for self-employed business owners drops to 20%. A significant 13% decrease. For those selling their own business, this is a big advantage.

Potential Tax Planning

Possibility of transferring sole trader business to limited company and making a significant income tax saving – We await full details of conditions to qualify for 20%

NOTE: It does not affect sale of property by investors, for example ‘buy to let’ properties.

Corporation Tax

Three year tax relief for start-ups is extended until 2018.
Decrease of Corporation Tax rate by half to 6.25% for certain Research and Development Companies – A Knowledge Development Box.

Note that this relief is linked to employing staff and based on amounts of Employers PRSI paid by the start-up company.

Childcare and Child Benefit

Free childcare for 3 year olds until they start school
Increase child benefit by €5 to €140 per month – €10 if 2 or more children
Paid Paternity leave of 2 weeks for fathers – Will self-employed get that too? Doubt it!
Free GP for under 12’s – Planned to come in but when?

OTHER BUDGET MEASURES

The 0.15% pension levy as it currently stands will no longer apply from January 2016
Commercial motor tax rates on vehicles will be capped at €900 – good for the haulage/couriers industry
Revaluation date of Property Tax to be suggested to move from 2016 to 2019
Home Renovation scheme extended until 31 December 2016
Cigarettes increase by 50c per pack, no change to alcohol or fuel
VAT rate of 9% will remain unchanged as will other VAT Rates
Cap on film relief expenditure to increase to €70 million
Bank Levy to continue to 2021
Minimum wage to increase to €9.15 – up 50c per hour
Bank Card Charge of €5 removed – 12c transaction charge in its place (capped @ €2.50 or €5 depending on card type)
Christmas bonus of €141 for jobseekers and €173 for pensioners on a weekly rate of €230
Old Age pension up €3 per week, fuel allowance up €2.50 per week and respite grant to be restored to €1,700