Budget 2023

Budget 2023 is announced today in the midst of another financial crisis for businesses and individuals. At the time of the previous Budget we had an economy that was starting to recover from the huge challenges and uncertainty caused by the pandemic but needed continued financial support. Now we have energy cost uncertainty and significant inflation which is having a real impact on individuals and businesses. Therefore, this Budget 2023 must be about protecting jobs and directly supporting individuals. Thankfully, tax receipts are strong which will help fund the new measures.
Some of the measures that the Minister for Finance has introduced are as follows:-

- A direct support scheme for business energy costs, Temporary Business Energy Support Scheme (TBESS) which will finance 40% of the energy price rises if a certain threshold is reached. Up to €10,000 per month can be returned to businesses and farms with an overall cap also applying. This will be administered by the Revenue Commissioners. 

- To help address rising inflation for individuals:-

  • the point at which an individual pays the top rate of income tax is set to be increased to €40,000 from €36,800. With small adjustments to personal, PAYE/Earned     Income credits and USC, this could benefit workers by around €800 and €1,600 for a couple.
  • electricity credits to all households of €600 towards energy costs.
  • a suite of direct payments will be made to social welfare recipients and other vulnerable groups.
  • renters are in line to receive a tax credit of €500 this year and a further €500 in 2023.

Unfortunately, the Government did not avail of the opportunity to support entrepreneurial business owners for example by reducing the capital gains tax rate of 33%, increasing the €1m threshold applying to Entrepreneur Relief (10%rate of capital gains tax) or for SME companies, simplifying the R&D Tax Credit qualifying criteria.

For residential property landlords, there was no significant incentive brought in through the tax system to keep them in the rental market. Indeed for those who remain owners but are not letting their properties, from 2023 a Vacant Homes Tax (VHT) will be introduced for properties that are not occupied for at least 30 days in a 12 month period subject to certain exemptions. The tax will be equal to 3 times the property’s base Local Property Tax before any “Local Adjustment Factor".

See our full Budget 2023 circular here.