- Post Budget 2016 Prepared by Statistics & Economic Research Branch, Revenue Commissioners October 2015 Ready Reckoners are provided for the following taxes: Income Tax & Universal Social Charge Pages 2-11 Deposit Interest Retention Tax (DIRT) Page 12 Capital Gains Tax (CGT) Page 13 Capital Acquisition Tax (CAT) Page 14-15 Stamp Duty Page 16 Excise Pages 17-20 Value Added Tax (VAT) Pages 21-24 Please note that the costings provided in this Ready Reckoner are estimates and should be treated as such. Ready Reckoner costings assume no behavioural change from an increase or decrease in taxation. Every reasonable effort has been made to ensure that the information provided is as accurate and clear as possible. Revenue's Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html Email: statistics@revenue.ie 1
Income Tax & Universal Social Charge These following costs / yields are based on 2016 estimates from the Revenue tax forecasting model using latest actual data for the year 2013, adjusted as necessary for income, self-employment and employment trends in the interim. The Income Tax Ready Reckoner covers the following: Income earners by Income Tax and USC rates in 2016 Income earners by gross income range in 2016 Increases and decreases to Income Tax and USC rates Page 3 Page 4 Page 5 Increases to Income Tax credits Page 6 Widening of standard Income Tax rate bands Page 7 Increases to USC rate bands Page 8 Increases to Income Tax exemption limits Page 9 Indexation Page 10 Changes to Income Tax relief on pensions Page 11 2
Estimated Income Earners by Income Tax and USC Rates in 2016 Number of Taxpayer % of Taxpayer Units* Units Income Tax Higher rate (40%) 474,200 20 Standard rate (20%) 1,068,500 44 Exempt 862,300 36 USC 8% rate 200,900 8 5.5% rate 1,052,600 44 3% rate 447,600 19 Exempt 703,800 29 Paying neither Income Tax or USC 703,800 29 Total Income Earners 2,405,000 29 *Married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit. 3
Income Earners by Gross Income Range in 2016 Range of Gross Number of Income Tax / USC Income Taxpayer Units* 0 10,000 413,823 1,822 2.70 10,000 13,000 111,637 1285 5.50 13,000 15,000 81,266 1,139 18 15,000 18,000 125,513 2,074 45 18,000 20,000 89,617 1,703 62 20,000 25,000 209,953 4,720 253 25,000 27,000 82,537 2,146 143 27,000 30,000 117,182 3,338 258 30,000 35,000 177,165 5,754 535 35,000 40,000 150,975 5,653 642 40,000 50,000 236,001 10,544 1,547 50,000 60,000 166,411 9,099 1,641 60,000 70,000 114,186 7,392 1,465 70,000 75,000 44,997 3,260 689 75,000 100,000 137,627 11,806 2,787 100,000 150,000 92,250 10,989 3,097 150,000 200,000 25,801 4,408 1,429 200,000 275,000 13,753 3,180 1,108 Over 275,000 14,243 7,530 2,974 Total 2,404,937 97,842 18,701 *Married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one tax unit. The Tax/USC figures do not take into account the Earned Income Credit 4
Increases and Decreases to Income Tax and USC Rates First Year Full Year Cost of 1% point decrease in Income Tax rates 20% rate -399-543 40% rate -170-246 Yield from 1% point increase in Income Tax rates 20% rate 405 551 40% rate 170 246 Cost of 1% point decrease in Universal Social Charge rates Decrease 1% rate to 0% -173-237 Decrease 3% rate to 2% -109-148 Decrease 5.5% to 4.5% -253-348 Decrease 8% rate to 7%* -75-125 Yield from 1% point increase in Universal Social Charge rates Increase 1% rate to 2% 173 237 Increase 3% rate to 4% 109 148 Increase 5.5% rate to 6.5% 253 348 Increase 8% rate to 9%* 75 125 *Includes those paying the 3% surcharge for non-paye income that exceeds 100,000 in a year. 5
Cost of Increasing Income Tax Credits First Year Full Year Increase Single Persons Credit by 100 From 1,650 to 1,750-58 -78 Increase Married Persons Credit by 200 From 3,300 to 3,500-94 -130 Increase Widowed Persons Personal Credit by 100 From 1,650 to 1,750-4.1-5.7 Increase Lone Parent Credit by 100 From 1,650 to 1,750-4.4-6.0 Increase Widowed Persons Top up Credit by 100 From 540 to 640-3.8-5.2 Increase PAYE Credit by 50 From 1,650 to 1,700-60 -77 Increase Earned Income Credit by 50 From 550 to 600-1.7-5.6 Increase Earned Income Credit by 550 From 550 to 1,100-18 -61 Increase Earned Income Credit by 1,100 From 550 to 1,650-37 -123 Increase Home Carer s Credit by 50 From 1,000 to 1,050-2.6-3.6 Increase Dependent Relative Credit by 20 From 70 to 90-0.4-0.5 Increase Incapacitated Child Credit by 100 From 3,300 to 3,400-1 -1.5 Increase Blind Persons Credit (incl Guide Dog) -0.5-0.7 By 500 for single person From 1,650 to 2,150 By 1,000 for both spouses / civil partners blind From 3,300 to 4,300 Increase Widowed Parent Bereavement Credit by 100-0.2-0.2 Increase Age Credit -8.1-11.3 By 50 for single / widow From 245 to 295 By 100 for married / civil partners From 490 to 590 6
Cost of Widening of Income Tax Standard Rate Bands These tables demonstrate the cost when the various tax bands are increased Single & Widowed - Current Band 33,800 Married 1 Earner - Current Band 42,800 Band Increase Revised Band First Year Cost ( m) Full Year Cost ( m) Band Increase Revised Band First Year Cost ( m) Full Year Cost ( m) 100 33,900 5.6 7.4 100 42,900 2 2.7 500 34,300 27.6 36.7 500 43,300 9.8 13.5 1,000 34,800 54.4 72.4 1,000 43,800 19.5 26.7 1,500 35,300 80.4 107 1,500 44,300 29.1 39.9 Band Increase Married 2 Earners - Current Bands 42,800 24,800* Revised Band Major Earner Revised Band Minor Earner First Year Cost ( m) Full Year Cost ( m) 100 42,900 24,900 5.5 7.6 500 43,300 25,300 27.6 37.7 1,000 43,800 25,800 54.5 74.3 1,500 44,300 26,300 80.6 109.9 Total cost of Band Widening Band Increase First Year Cost ( m) Full Year Cost ( m) 100 13.1 17.7 500 65 87.9 1,000 128.4 173.4 1,500 190.1 256.8 *Assumes that the maximum allowable transferability of 9,000 across the board These costs do not take into account the Earned Income Credit 7
Cost of Increasing USC Rate Bands First Year Full Year Income under 13,000 is exempt Increase by 100 to 13,100-0.6-0.8 Increase by 500 to 13,500-2.9-4.0 Increase by 1,000 to 14,000-6 -8.3 Increase by 1500 to 14,500-9.4-13 First 12,012 is charged at 1% * Increase by 100 to 12,112-2.9-3.9 Increase by 500 to 12,512-14.4-19.7 Increase by 1,000 to 13,012-28.9-39.4 Increase by 1,500 to 13,512-48.2-59.0 From 12,012 to 18,668 is charged at 3% * Increase by 100 to 12,112 and 18,768-6.3-8.7 Increase by 500 to 12,512 and 19,168-30.0-41.2 Increase by 1,000 to 13,012 and 19,668-58.9-81.2 Increase by 1,500 to 13,512 and 20,168-88.3-121.6 From 18,668 to 70,044 is charged at 5.5% * Increase by 100 to 18,768 and 70,144-3.4-4.6 Increase by 500 to 19,168 and 70,544-15.4-21.2 Increase by 1,000 to 19,668 and 71,044-29.8-41.0 Increase by 1,500 to 20,168 and 71,544-44.8-61.6 Above 70,044 is charged at 8%* Increase by 500 to 70,544-1.9-2.7 Increase by 1,000 to 71,044-3.6-5.2 Increase by 2,000 to 72,044-7.0-10.1 Increase by 5,000 to 75,044-16.6-24.0 * The 13,000 exemption threshold remains unchanged for the USC rate band increases 8
Cost of Increasing Income Tax Exemption Limits First Year Full Year Aged 65 and over By 100 for single / widow and 200 married 2.6 3.8 By 300 for single / widow and 600 married 7.7 11.2 Child addition Increase limit by 100 per child (all children) 0.07 0.1 Increase limit by 300 per child (all children) 0.2 0.3 9
Cost of Indexation First Year Full Year Indexation at 1% Personal Tax Credits (incl Home Carer's Credit) with rate bands -76-103 Exemption limits, Personal Tax Credits with rate bands -80-110 PAYE Credit, Exemption limits, Personal Tax Credits with rate bands -101-136 Earned Income Credit -0.2-0.6 USC rate bands -11-16 10
Changes to Income Tax Relief on Pensions Yield of decreasing the ceiling for occupational pension schemes, RACs and PRSAs and / or reducing the marginal effective rate applicable to these reliefs. Rate Ceiling 40% 34% 33% 30% 20% 115,000 0* 99 115 165 330 110,000 7.9 106 122 171 334 105,000 17 113 129 178 338 100,000 26 121 137 184 343 95,000 36 130 145 192 348 90,000 47 139 154 200 353 85,000 59 149 164 209 359 80,000 71 159 174 218 365 75,000 85 171 186 229 368 70,000 100 184 198 240 380 65,000 117 198 212 252 388 60,000 135 213 227 266 397 *Current rate and ceiling. 11
Deposit Interest Retention Tax (DIRT) Full Year Reduction in the Standard Rate of DIRT From 41% to 40% -7.3 From 41% to 38% -21.8 From 41% to 36% -36.3 Increase in the Standard Rate of DIRT From 41% to 42% 7.3 From 41% to 44% 21.8 From 41% to 46% 36.3 12
Capital Gains Tax (CGT) M Full Year Reduction in the CGT Rate From 33% to 32% -21 From 33% to 31% -42 From 33% to 28% -106 Increase in the CGT Rate From 33% to 34% 21 From 33% to 35% 42 From 33% to 38% 106 Abolish Annual Exemption 19 Increase in Annual Exemption From 1,270 to 1,770-8 13
Capital Acquisitions Tax (CAT) Updated October 2015 2017 Full Year Reduction in the CAT Rate (on or after 15 October 2016) From 33% to 32% -9.8-11.4 From 33% to 30% -29.3-34.1 From 33% to 28% -49.0-57.0 From 33% to 23% -98.0-114.0 Increase in the CAT Rate (on or after 15 October 2016) From 33% to 34% 9.8 11.4 From 33% to 36% 29.3 34.1 From 33% to 38% 49.0 57.0 From 33% to 43% 98.0 114.0 Increase in tax free thresholds (on or after 15 October 2016)* By 1% -2.6-3.0 By 3% -7.4-8.6 By 5% -12.0-14.0 By 10% -22.7-26.4 Decrease in tax free thresholds (on or after 15 October 2016)* By 1% 2.6 3.0 By 3% 7.7 9.0 By 5% 12.9 15.0 By 10% 26.7 31.0 Reduce Agricultural Relief (on or after 15 October 2016) From 90% to 80% 10.4 12.1 From 90% to 70% 24.6 28.6 From 90% to 60% 42.5 49.4 From 90% to 50% 63.0 73.3 Reduce Business Relief (on or after 15 October 2016) From 90% to 80% 6.4 7.4 From 90% to 70% 13.6 15.8 From 90% to 60% 21.4 24.9 From 90% to 50% 29.8 34.6 *Thresholds are currently 280,000 for Category A, 30,150 for Category B and 15,075 for Category C. 14
Rate** Ready Reckoner Effects of a simultaneous change in rate and thresholds The table below shows the estimated effect of changing both the tax free thresholds and the rate of CAT applied simultaneously. Percentage Change in Thresholds* m -10% -5% -3% -1% 0% +1% +3% +5% +10% 23% -92-103 -107-112 -114.0-116 -120-123 -132 28% -31-44 -49-54 -57.0-59 -64 69-79 30% -6-20 -26-31 -34.0-37 -42 47-58 32% 18 4-3 -8-11.0-14 -20 25-37 33% 31.0 15.0 9.0 3.0 0.0-3.0-9.0 14.0-26.0 34% 43 27 21 15 11.0 8 3 3-16 36% 68 51 44 37 34.0 31 25 19 5 38% 92 75 67 60 57.0 53 47 41 26 43% 154 134 126 118 114.0 110 102 95 79 *Percentage changes in the thresholds have been applied to each of the three categories. **The current rate of CAT is 33%. Note: The estimated cost of any given increase in thresholds and simultaneous decrease in rate does not result in an equal estimated yield for an equivalent decrease in thresholds and simultaneous increase in rate. This is due to the interaction of the CAT rate with differing thresholds in each of the three categories. 15
Stamp Duty Residential Property Increase stamp duty to 2% of excess above 500,000 26 Cost/Yield Increase stamp duty to 2% of excess above 600,000 18 Increase stamp duty to 2% of excess above 700,000 11 Increase stamp duty to 2% of excess above 800,000 7 Non-Residential Property Increase stamp duty to 3% of excess above 500,000 99 Increase stamp duty to 3% of excess above 600,000 97 Increase stamp duty to 3% of excess above 700,000 95 Increase stamp duty to 3% of excess above 800,000 94 Shares Increase the rate to 1.1%* 48 Decrease the rate to 0.9%* -48 Cheques and Financial Cards Increase stamp duty on business cheques by 50% 10.3 Increase stamp duty on personal cheques by 50% 6.9 Abolishing duty on credit cards -63 10% increase in the stamp duty on credit cards 6.3 10% decrease in the stamp duty on credit cards -6.3 Abolishing duty on cash cards** -22.44 10% increase in the stamp duty on cash cards 2.2 10% decrease in the stamp duty on cash cards -2.2 Figures are calculated on the basis of expected 2016 outturn. Last updated: December 2015. * Current rate of stamp duty on shares is 1%. Each subsequent increase/decrease of the rate by 0.1% will result in a proportionate yield/cost. ** Includes ATM cards, debit cards and combined ATM/debit cards. 16
Excise The Excise Ready Reckoner covers the following: Oils Alcohol Tobacco Page 18 Page 19 Page 20 17
Oils Full Year Unleaded petrol (per litre) Increase by 1 cent 13 Increase by 3 cent 40 Increase by 5 cent 66 Increase by 10 cent 130 Auto diesel (per litre) Increase by 1 cent 22 Increase by 3 cent 65 Increase by 5 cent 107 Increase by 10 cent 213 Both increase amounts and additional revenue estimates are VAT inclusive. 18
Alcohol Full Year Beer (per pint) Increase by 1 cent 7 Increase by 3 cent 20 Increase by 5 cent 33 Increase by 10 cent 65 Spirits (per half glass) Increase by 1 cent 3 Increase by 3 cent 10 Increase by 5 cent 17 Increase by 10 cent 33 Cider & perry (per pint) Increase by 1 cent 1 Increase by 3 cent 3 Increase by 5 cent 5 Increase by 10 cent 9 Wine (per 75 cl) Increase by 5 cent 3 Increase by 10 cent 6 Increase by 25 cent 14 Increase by 50 cent 26 Both increase amounts and additional revenue estimates are VAT inclusive. 19
Tobacco Full Year Cigarettes (per pack of 20) Increase by 5 cent In the range from -4 to +6 Increase by 10 cent In the range from -7 to +12 Increase by 25 cent In the range from -19 to +31 Increase by 50 cent In the range from -41 to +61 Both increase amounts and revenue estimates are VAT inclusive. Forecast receipts of tobacco products tax use an elasticity measure to partially reflect the responsiveness (or change in behaviour) of smokers following duty and price changes. Increases in duties are forecast to lead to increases in receipts, albeit recognising that some smokers will consume less and consequently some of the increases in receipts from higher prices are negated. Further cigarette price rises, particularly at the higher end, may not increase Excise receipts and this is indicated through the use of the range of estimates above. To reflect the potential variations in consumption change in smokers, the range above is based on varying the elasticities used in the forecast calculation. The elasticities used are derived from research conducted by Revenue. 20
Value Added Tax (VAT) The VAT Ready Reckoner covers the following: Activity by VAT rate Increases and decreases to VAT rates Increases in VAT registration thresholds Page 22 Page 23 Page 24 21
% of Activity % of Tax Receipts Activity by VAT Rate Standard rate of 23% applies to 36 57 Reduced rate of 13.5% applies to 36 33 Reduced rate of 9% applies to 16 10 Zero rate applies applies to 11 0 22
CPI Increases and Decreases to VAT Rates Full Year Effect* 9% Reduced Rate 1% Increase / Decrease +/- 143 +/- 0.11 13.5% Reduced Rate 1% Increase / Decrease +/- 308 +/- 0.07 23% Standard Rate 1% Increase / Decrease +/- 318 +/- 0.33 Zero Rate Increased 0% to 5% 462 0.57 0% to 9% 832 1.02 0% to 13.5% 1,248 1.54 0% to 23% 2,127 2.62 Restructuring the VAT system on a revenue-neutral basis Zero, 9%, 13.5% & 23% rates merged to a 15.4% rate 13.5-1.1 9%, 13.5% & 23% rates merged to a 17.5% rate 15.1-1.8 *Percentage effect on consumer price index (CPI). 23
Increases in VAT Registration Thresholds Full Year Change in Services Threshold 37,500 to 50,000 51 37,500 to 75,000 198 37,500 to 87,500 293 37,500 to 100,000 403 37,500 to 125,000 666 Change in Goods Threshold 75,000 to 100,000 84 75,000 to 150,000 324 75,000 to 175,000 479 75,000 to 200,000 659 75,000 to 250,000 1,091 24