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| VALUE ADDED TAX (VAT) |
| VAT Registration Thresholds for SMEs |
| The VAT registration thresholds for small businesses are being increased from 35,000 to 37,500 in the case of services, and from 70,000 to 75,000 in the case of goods. These increases will take effect from 1 May 2008. |
| Reduced VAT Biofuels Supplies |
| The VAT rate on the supply of seeds, and of roots, bulbs, rhizomes and similar supplies used for the agricultural production of bio fuel crops, e.g. elephant grass, will be reduced from 21% to 13.5% with effect from 1 March 2008. |
| Review of VAT on Property Transactions |
| Provision will be made in the Finance Bill for the introduction of a new system for applying VAT to property transactions. |
| Reverse charge mechanism in the Construction Sector |
| A reverse charge mechanism for VAT on supplies made by a subcontractor to a principal contractor in the construction sector is being introduced with effect from 1 September 2008. |
| STAMP DUTY |
| Residential Property - New Rate Structure |
| A simplified system, incorporating an exemption of 125,000 with 2 rate bands of 7% and 9%, is being introduced for instruments executed on or after 5 November 2007. The 7% rate applies up to 1,000,000 and it is charged on the excess of the consideration over 125,000. The 9% rate applies where the consideration exceeds 1,000,000 and it is charged on the excess of the consideration over 1,000,000. |
| Reduction of Claw back Period |
The claw back period for first-time buyer relief and owner-occupier relief is being reduced from 5.
years to 2 years in certain circumstances. |
| Cheques/Drafts |
| The stamp duty chargeable on cheques/drafts is being increased from 15 cent to 30 cent. |
| Site to Child Exemption |
| The exemption threshold for a site, which is transferred from a parent to a child for the purposes of constructing the childs principal private residence, is being increased from 254,000 to 500,000 |
| CAPITAL ACQUISITIONS TAX |
| There were no changes announced in the Budget. |
| CAPITAL GAINS TAX |
| Increase in Threshold for CGT Retirement Relief |
| An exemption from Stamp Duty and Capital Gains Tax applies where a parent transfers a site, with a market value not exceeding 254,000, to a child to enable that child construct his/her principal private residence. This threshold has been increased to 500,000 for transfers on or after 5 December 2007. |
| FARMING TAXATION |
| Farmers VAT Flat-rate Addition |
| The rate of the flat rate addition payable by VAT registered traders on purchases from non-VAT registered farmers remains unchanged at 5.2%. |
| Tax relief on the dissolution of farm partnerships |
| A new relief from Capital Gains Tax on the dissolution of farm partnerships will be introduced in the Finance Bill. The relief will run for a period of 5 years. |
| Milk Production Partnerships |
| Where a farmer on income averaging enters a milk production partnership the provisions that result in a claw back of income tax will no longer apply. |
| Sugar Beet Diversification |
| Provision is being made to allow farmers in receipt of the Diversification Aid element of the Sugar Beet Compensation Package to spread these payments over six years for the purpose of calculating taxable income. |
| EXCISES |
| Tobacco Excise |
| The Excise Duty on a packet of 20 cigarettes is being increased by 30 cents (including VAT) with a pro-rata increase on other tobacco products, with effect from midnight on 5 December 2007. |
| Vehicle Registration Tax (VRT) |
| The current VRT system uses engine size as the criterion to determine the VRT rate to be applied to a car. Under the revised VRT system the CO2 emissions of a car will replace engine size as the criterion to determine the VRT rate payable on the car at point of registration. Lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates. The VRT rates will continue to be applied to the Open Market Selling Price of the car. The revised VRT system will take effect on 1 July 2008. |
| CO2 Emissions Bands |
g CO2/km * |
VRT Rates |
| A |
0 - 120g |
14% |
| B |
121 - 140g |
16% |
| C |
141 - 155g |
20% |
| D |
156 - 170g |
24% |
| E |
171 - 190 g |
28% |
| F |
191 - 225g |
32% |
| G |
226g and over |
36% |
|
| The existing 50% VRT relief scheme for series production hybrid electric and flexible fuel cars, which is due to expire on 31 December 2007, is being extended to 30 June 2008. |
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