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| BUDGET 2007/ 08 |
| This Budget Summary only contains details of the relevant tax changes, it does not include details of Social Welfare changes. |
| PERSONAL TAXATION |
| Tax, Credit & Band Changes |
Personal Credits increased by €70 single/€140 married to €1,830 single/€3,660 married.
Employee (PAYE) tax credit increased by increased by €70 to €1,830 |
| Standard Rate Bands increased to: |
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* €35,400 Single |
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* €44,400 Married One Income |
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* €70,800 Married Two Incomes, and |
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* €39,400 Lone Parent/Widowed Parent |
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| Age Exemption Limits (single/married) increased from €19,000/€38,000 to €20,000/€40,000. |
| PRSI Changes |
The employee’s annual earnings ceiling (above which they pay no social insurance contributions) is being increased from €48,800 to €50,700
Health Levy threshold increased from €480 per week to €500 per week
PRSI threshold increased from €339 per week to €352 per week |
| Mortgage Interest Relief |
The current annual ceiling on the amount of interest that can be allowed on a mortgage is being increased with effect from 1 January 2008 for first-time buyers from €8,000/€16,000 single/married to €10,000/€20,000 single/married. The additional relief will be available for the first seven years for which there is an entitlement to mortgage interest relief.
The ceiling for non-first-time buyers remains unchanged at €3,000/€6,000 for single/married. |
| Increase in the Specified Rates for Preferential Loans |
| To reflect increases in interest rates, the specified rate in respect of home loans is being increased from 4.5% to 5.5% and the specified rate in respect of other loans is being increased from 12% to 13% . |
| Service Charges |
| Relief on service charges remains unchanged. A maximum of €400 tax relief is granted (at 20% tax rate) in 2008 for charges paid in the year 2007. |
| Rent-a-Room Relief |
| The limit of the exemption from income tax which applies to rent received, where a person rents out a room or rooms in his or her principle private residence, is to be increased from €7,620 to €10,000. |
| Rent Relief |
For those aged under 55, the maximum level of rent paid for private rented accommodation, on which tax relief at the standard rate can be claimed, increased by €200 single/€400 married and widowed to €2,000/€4,000 per annum.
For those aged 55 and over the respective amounts are being increased to €4,000/€8,000. |
| COMPANY/BUSINESS TAXATION |
| Preliminary Tax payment for Corporation Tax |
| The corporation tax liability threshold for treatment as a small company is being increased from €150,000 to €20,000. This will be effective from preliminary tax payment dates arising after 6 December 2007. |
| Capital Allowances (and Expenses) for Business Cars |
A revised scheme for capital allowances and leasing expenses for cars used for business purposes is being introduced. The revision will link the availability of such allowances and expenses to the CO2 emission levels of the vehicles.
Category A = 0 –120g/km
C category B/C = 121 – 155 g/km
Category D/E 156 – 190
Category F/G = 191 g/km +Vehicles
Cars with CO2 emission levels in Category A/B/C above will benefit from capital allowances at the current car value threshold underthe existing scheme of €24,000, regardless of the cost of the car. Cars in Category D/E will receive allowances of 50% of the current car value threshold or 50% of the cost of the car, if lower. Cars in Category F/G will not qualify for capital allowances. |
| Leasing Expenses |
| Cars in Category A/B/C above will benefit from a proportionately higher deduction than the actual leasing expenses where the cost of the car is less than €24,000. Cars in Category D/E will get 50% of the leasing expenses they would otherwise benefit under the current scheme. Cars in Category F/G will not qualify for a deduction for leasing expenses. |
| Extension of S481 Film Relief |
| The scheme will be renewed for another 4 years to 31 December 2012. |
| BES Scheme |
| The requirement that recycling companies must have received grant assistance before availing of the Business Expansion Scheme (BES) is to be replaced by a requirement that their business proposals must be certified by an industrial development agency or County Enterprise Board before they avail of the scheme. |
| R&D Expenditure |
| The base year for expenditure which is used to calculate the qualifying incremental expenditure on research and development (R&D) under the tax credit scheme is being fixed at 2003 for a further four years to 2013. The change will provide an additional incentive for increased expenditure on R&D in future years and it will offer more certainty to industry in relation to the tax credit scheme. |
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