CTS Budget 2019 Newsletter
Minister for Finance, Mr Paschal Donohoe TD, announced the Budget for 2019 earlier today in the Dáil. The minister announced that GDP has increased by 7.5% and that strong growth is forecast to continue into 2019. Despite these promising figures, tax cuts were not the order of the day.
On a positive note, the Budget included modest personal tax relieving measures, a €10,000 increase to the Group A parent to child CAT threshold and various tax reliefs which were due to cease on 31 December 2018 were extended.
However, in a move which is sure to concern businesses in the tourism and hospitality sectors, the 9% rate of VAT charged by restaurants, hotels etc since 1 July 2011 will cease to apply, subject to a limited number of exceptions. With effect from 1 January 2019 the reduced rate of VAT (currently 13.5%) will apply.
The main focus of the Budget was on spending, with the Housing Crisis taking centre stage. Some of the talking points included:
- The allocation of €1.25 billion for the delivery of 10,000 social homes in 2019.
- Increased funding for the Housing Assistance Payment.
- The creation of a “rainy day fund” with initial funding of €1.5 billion coming from the Ireland Strategic Investment Fund.
Last year we noted that Budget 2018 was announced with the uncertainty that Brexit had brought to the Irish economy and, unfortunately, this has remained the case for Budget 2019. A range of measures including a further loan scheme for SMEs and the agricultural sector were announced with a view towards minimising the impact of Brexit.
We invite you to review our analysis of the Budget in our newsletter and the Cahill Taxation team are available to deal with any queries that you may have on the details.
Impressions from our Budget 2019 Breakfast Briefing: