budget 2009 perspective
DESCRIPTION
Budget 2009 Breakfast briefing presentationTRANSCRIPT
11
Budget Budget
20092009
Breakfast BriefingBreakfast BriefingRiverside Park Hotel, 15/10/2008Riverside Park Hotel, 15/10/2008
“Nothing to fear, but fear itself!”
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�� Economic OverviewEconomic Overview
�� Impact for IndividualsImpact for Individuals
�� Impact on BusinessImpact on Business
�� Other Budget ChangesOther Budget Changes
�� Company Law DevelopmentsCompany Law Developments
�� Tax Policy & PracticeTax Policy & Practice
�� Year End Tax PlanningYear End Tax Planning
OVERVIEW
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Economic OverviewEconomic Overview
Where next for the economy?Where next for the economy?
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What What
goes goes
up,.....up,.....
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The credit crunchThe credit crunch
55
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Exchange Rate MovementsExchange Rate Movements
66
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Consumer confidenceConsumer confidence
77
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PositivesPositives
88
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Budget 2009 Budget 2009 –– Impact for Impact for
Individual TaxpayersIndividual Taxpayers
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Main ChangesMain Changes
–– Levy on All IncomeLevy on All Income
–– Restriction of Pension Contribution LimitRestriction of Pension Contribution Limit
–– Tax on SavingsTax on Savings
–– Mortgage Interest ReliefMortgage Interest Relief
Budget 2009 Breakfast BriefingBudget 2009 Breakfast Briefing
Income Tax Levy
• What can you do to reduce your exposure:
• Reduce salary and maximise expenses
• Avail of e-working allowances (pay for your staff
broadband at home instead of a pay rise)
Rate
Income Levy %
Income up to €100,000 1%
Balance €100,100 2%
Payable by everyone
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Main Tax BandMain Tax Band
Existing Proposed Increase
Standard Rate Tax Bands € € €
Single/Widowed Personal 35,400 36,400 1,000
Married, One Income 44,400 45,400 1,000
Married , Two Incomes 70,800 72,800 2,000
One Parent/Widowed Parent 39,400 40.400 1,000
PRSI Ceiling 50,700 52,000 1,300
No increase in tax credits
Budget 2009 Breakfast BriefingBudget 2009 Breakfast Briefing
Restriction of Pension Contribution LimitRestriction of Pension Contribution Limit
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Existing Proposed Decrease
Contribution Limit €275,239 €150,000 €125,239
Effect % Relief Reduction in
Limit
Tax Effect
@ 41%
Under 30 15% 18,786 7,890
30 to 39 20% 25,048 10,520
40-49 25% 31,310 13,150
50 to 54 30% 37,572 15,780
50 to 59 35% 43,834 18,410
60 and over 40% 50,096 21,040
Budget 2009 Breakfast BriefingBudget 2009 Breakfast Briefing
Restriction of Pension Contribution LimitRestriction of Pension Contribution Limit
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Impact on preliminary tax liabilityImpact on preliminary tax liability
31/10/2009 will be last year higher limit can be availed31/10/2009 will be last year higher limit can be availed
Other pension changesOther pension changes
No indexation of the Standard and Personal Fund No indexation of the Standard and Personal Fund
Thresholds'Thresholds'
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Tax on SavingsTax on Savings
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Existing Proposed Increase
Deposit Interest Retention Tax 20% 23% 3%
Life Assurance policies and
investments funds
23% 26% 3%
Effective from 01/01/2009
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Personal TaxationPersonal TaxationMortgage Interest Relief increased and the period over which Mortgage Interest Relief increased and the period over which ‘‘enhanced enhanced first time buyerfirst time buyer’’ relief may be claimed is the first seven years of the relief may be claimed is the first seven years of the mortgagemortgage
Existing Proposed Maximum Benefit
Single Married
Year s 1 and 2 20% 25% � €500 � €1,000
Years 3 to 5 20% 22.5% � €250 � €500
Non first time buyers 20% 15% � €500 � €1,000
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Personal TaxationPersonal TaxationMarried Couple , Two Incomes earning Married Couple , Two Incomes earning €€60k, Two Children60k, Two Children
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Budget 2009 Budget 2009 –– Impact for BusinessImpact for Business
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Main ChangesMain Changes
Increase in VAT rateIncrease in VAT rate
Increase in CGT rateIncrease in CGT rate
3 year exemption from Corporation & Capital gains tax 3 year exemption from Corporation & Capital gains tax
for start up businessfor start up business
Capital allowance for some green technologiesCapital allowance for some green technologies
Stamp Duty reduction on commercial buildingsStamp Duty reduction on commercial buildings
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Change in VAT RatesChange in VAT Rates
Existing Proposed Increase
Standard Rate VAT 21% 21.5% 0.5%
Reduced Rate 13.5% 13.5% No Change
Flat Rate Farmers 5.2% 5.2% No Change
Changes take effect from 01 December 2008
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Capital Gains TaxCapital Gains Tax
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Existing Proposed Increase
Capital Gains Tax 20% 22% 2%
Changes take effect from 15th October 2008
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Corporation TaxCorporation Tax
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Corporation TaxCorporation Tax
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Capital Allowances Scheme for certain energyCapital Allowances Scheme for certain energy--
efficient equipmentefficient equipment
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Stamp Duty on Commercial BuildingsStamp Duty on Commercial Buildings
Aggregate Consideration Rate of Duty
Up to €10,000 Exempt€10,001 to €20,000 1%€20,001 to €30,000 2%€30,001 to €40,000 3%€40,001 to €70,000 4%€70,001 to €80,000 5%Over €80,000 6%
The reduction to 6% will provide attractive to foreign investments funds
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Other Budget ChangesOther Budget Changes
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Move to electronic transactionsMove to electronic transactionsExisting Proposed Increase
Stamp Duty on Cheques €0.30 €0.50 �€0.20
ATM Cards €5 €2.50 �€2.50
Debit Cards €5 €2.50 �€2.50
Combined ATM/Debit Cards €10 €5.00 �€5.00
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Move to electronic transactionsMove to electronic transactions
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Other Budget ChangesOther Budget Changes
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Other Budget ChangesOther Budget Changes
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Other Topical IssuesOther Topical Issues
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VAT treatment of forfeited depositsVAT treatment of forfeited deposits
Relevant to hotels and other business which receive Relevant to hotels and other business which receive
deposits as part of their normal businessdeposits as part of their normal business
Where the deposit is forfeited and retained it is treated Where the deposit is forfeited and retained it is treated
as a cancelation charge and exempt from VATas a cancelation charge and exempt from VAT
The VAT paid on the deposit can be reclaimedThe VAT paid on the deposit can be reclaimed
VAT can be reclaimed for prior years subject to the four VAT can be reclaimed for prior years subject to the four
year rule.year rule.
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VAT Reverse Charge for Principal VAT Reverse Charge for Principal
Contractors and SubContractors and Sub--contractorscontractors
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More InformationMore Information
www.perspective.ie/whatsnew.htmlwww.perspective.ie/whatsnew.html
www.perspective.ie/budget.htmlwww.perspective.ie/budget.html
www.budget.gov.iewww.budget.gov.ie
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Unit B4a, Enniscorthy Bus. Prk
Old Dublin Road, Enniscorthy
Co. Wexford.
www.perspective.ie
053 9242842