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Guide to Pay & File

You could face stiff penalties over money earned on the side, or from Airbnb, unless you pay tax owed on those earnings in time, writes Louise McBride

This year’s tax return deadline is fast approaching – and if you’re one of those who thinks that tax returns have absolutely nothing to do with you, check that this is truly the case. Many people don’t realise they have to file a tax return – while there are others who chance their arm and choose not to file a return in the hope they can avoid paying tax on money earned on the side.

Failure to file a tax return when you need to could cost you dearly though – there are stiff penalties for people who don’t pay their taxes correctly and on time. So don’t make the mistake of thinking that it is just the self-employed and small businesses who must file a tax return this year – anyone earning money which cannot be taxed in the normal way must usually file a return and pay whatever tax is due.

Here are some of the main reasons why you, the ordinary-person-on-the-street, might have to file a tax return in the next few weeks.

Airbnb

Airbnb, the online accommodation service that allows people to make extra money by renting out their properties, has become a handy earner for many Irish people in recent years. There are concerns that a number of those who have earned money from Airbnb have not declared – or paid tax on – that income. Indeed the Revenue Commissioners has written to about 12,000 people to warn them to include money earned from Airbnb in their tax returns. These letters were sent on foot of information received by Revenue from Airbnb.

The average Irish Airbnb host earned about €3,500 in 2017 – though some hosts earned much more than that.

Money earned as an Airbnb host is taxable income – so it is important to declare such income to Revenue and pay any tax due. You pay income tax, PRSI and the Universal Social Charge (USC) on Airbnb income – and the rate of income tax paid depends on whether your total earnings require you to pay tax at the 40pc or 20pc rate.

You might not have to file a tax return for Airbnb income if you’re a PAYE worker and the profit earned as an Airbnb host is no more than €5,000 a year. You must still, however, come to an arrangement with Revenue to pay the tax due. “If you’re a PAYE worker, you may be able to adjust your tax credits and rate band to pay the tax due through the PAYE system – if the net Airbnb income is less than €5,000 for a tax year,” said Norah Collender, tax technical manager with Chartered Accountants Ireland. “In such cases, you should contact your local tax office or use Revenue’s online self-service system, MyAccount to have the tax liability coded on to your tax credit certificate. You will have less take-home pay as the Airbnb tax bill is paid off.”

Should you be unable to pay the tax due on your Airbnb income through the PAYE system, you must declare that income in a tax return and pay whatever tax is due. Self-employed people, for example, must file a tax return for any Airbnb income earned. So too must anyone who has earned a profit of more than €5,000 – or a gross income of more than €30,000 (regardless of profit) – from being an Airbnb host.

The tax rules around Airbnb income can be confusing. The accommodation provided through Airbnb is often short-term in nature (as it is often provided to tourists, holidaymakers and other visitors). You do not qualify for rent-a-room relief (the scheme which allows you to earn up to €14,000 a year tax-free by renting out a room in your home) if letting out a property to short-term guests. Therefore, you won’t qualify for relief under the rent-a-room scheme if your Airbnb guests are only short-term.

The tax treatment of Airbnb income depends on whether or not the income arises in the course of a trade. “Generally speaking, for the income to be considered trading income, the property or room would be expected to be available for rent on a frequent and regular basis, rather than on a once-off or occasional basis,” said a spokeswoman for Revenue.

The extent to which you can write expenses off your Airbnb tax bill – and therefore reduce the amount of tax you must pay on that income – will depend on whether your Airbnb earnings are deemed to be trading income, or not.

“Expenses relating to the trading activity and a portion of expenditure on fixtures and fitting used for the trade can be offset against the income from the Airbnb activity,” said Collender. “However, an individual who got a one-off or occasional Airbnb payment is not treated as operating a trade and the extent to which these individuals can offset expenses against Airbnb income is more restrictive than for an individual operating a trade.”

Some of the expenses which you may be able to write off your tax bill if you are only an occasional Airbnb host (and therefore not running a trade) include commission paid to Airbnb, cleaning fees, and the cost of breakfast provided to the guests. However, the costs of insuring or maintaining the property would not be tax-deductible.

HOUSE SALE

When you sell a house, you must declare the sale of that property to Revenue – even if it was your only home for the years that you owned it or if no tax is due to be paid on any profits made from the sale. Should you have sold a house in 2017, you must declare that sale to Revenue before this year’s tax deadline.

If the property you sold was not your principal private residence (PPR) for the entire time that you owned the property, you may have a tax bill to pay – as Capital Gains Tax (CGT) must typically be paid on any profit earned from the sale of such a property.

You may be able to reduce or eliminate your CGT bill if the property was your main residence for any of the time you owned it – as you will be entitled to a tax exemption for the years that the property was your PPR.

Furthermore, there is a personal CGT exemption that allows you to earn the first €1,270 of your profit (or €2,540 if you are married and the property was held jointly) free of CGT.

Any CGT due on a property sold in 2017 must however have been paid by mid-December 2017 (if the property was sold between January 1 and November 30, 2017) – or by the end of January 2018 (if the property was sold in December 2017). So if you have not yet paid the CGT on a property sold in 2017, you are late paying your tax. “If the tax wasn’t paid, get it sorted as soon as possible and submit a 2017 tax return by November 14,” said Collender.

You do not have to pay CGT on profits earned from a house sale if that house was your main residence while you owned it (as long as there is no more than one acre of land around the house).

NIXERS

Income earned from nixers – such as grinds, gardening or plumbing jobs on the side – is usually taxable and must be declared to Revenue. There are a few exceptions to this rule: a bean an ti, for example, does not have to pay tax or file a tax return on money earned from the hosting of Gaeltacht students in her home.

Check if tax must be paid on earnings not taxed in the normal way, and if you must file a return.

Should you be a PAYE worker earning some money outside the PAYE system, you may not have to file a tax return if the money earned is below certain limits – as long as you come to an arrangement with Revenue to pay the tax on the extra earnings through the PAYE system.

Handy pointers for 2017 tax return

The Deadline

The deadline for paper-based tax returns is October 31, 2018 but if you’re filing your return online, the deadline is November 14. You must be registered with ROS (Revenue Online Service) to be able to file your return online. It could take a week or two to get registered with ROS, so if you haven’t done so already and are planning to file your return online, register as soon as possible.

Exempt income & tax returns

Even if you earned income in 2017 which is exempt from tax, you may still need to file a tax return for that income and declare the tax-exempt income in your return. This, for example, is the case with the rent-a-room relief scheme. Never assume that any income you earn is tax-free — always check with Revenue if income earned is taxable and if you must file a return for it. Income earned from taking a foreign student into your home can be tax-free — as long as you qualify for rent-a-room relief. You must still file a return to declare that tax-free income though.

Paternity and Maternity Pay

Maternity and paternity benefit are liable to income tax — but not to PRSI or the Universal Social Charge. So should you be self-employed, remember to declare any maternity or paternity benefit you received in 2017 in your tax return and to pay the tax due on that benefit. PAYE workers who get paternity or maternity pay do not need to file a tax return as Revenue should have already adjusted their tax credits and bands to ensure that tax was paid on the benefit.

Tax Return Forms for house sale

Self-employed individuals who sold a property in 2017 must declare that sale in the Capital Gains Tax (CGT) panel of their tax return form (Form 11). PAYE workers however can file their CGT return on the form CG1.

Tax Return Forms for Airbnb

As this year’s tax return deadline is for the 2017 tax year, it is income earned as an Airbnb host in 2017 which must be declared by the end of this month (or by November 14 — if filing the return online). “If you’re a PAYE worker and have Airbnb income in 2017 which you didn’t sort out through the PAYE system by having your tax credits and rate band adjusted, then you have until 14 November this year to file a Form 12 and pay over the tax due on the income,” said Norah Collender of Chartered Accountants Ireland. “The form is complex so don’t put off completing it until the day of the deadline.”

Self-employed people can use the Form 11 to declare any income earned through Airbnb. “If you are frequently getting an income from Airbnb, you need to complete the section dealing with trading income,” said Collender. “If you only got a one-off or infrequent payment from Airbnb, you should complete the section of the return dealing with fees and commission earned from sources of income other than employments or directorships.”

Should you have earned money as an Airbnb host prior to 2017, and never declared or paid tax on this income, contact Revenue soon to settle your tax bill for that income. You are likely to face interest and penalties for late payment of tax but failure to settle your tax bill now could see you face much tougher tax penalties in the future.

Article Source: http://tinyurl.com/kbwqb42

Monday 22 October 2018 Brexit already having ‘negative impact on majority of UK firms’

Eight out of 10 UK firms surveyed by the Confederation of British Industry (CBI) have said that Brexit has had a “negative impact” on their investment decisions.

Almost one in five also stated that the point of no return for triggering their plans has already passed.

The powerful UK business lobby, which surveyed 236 firms – representing 101 large companies and 135 SMEs – revealed the majority of firms will implement damaging contingency plans in the absence of greater certainty on Brexit by December.

Contingency plans include cutting jobs, adjusting supply chains outside the UK, stockpiling goods and relocating production and services overseas.

“The situation is now urgent,” said Carolyn Fairbairn, director general of the CBI, who warned that as long as a ‘no-deal’ scenario remains a possibility, the effect is corrosive for the UK economy, jobs and communities.

The UK-wide survey comes as the Irish Government concludes a nationwide ‘Getting Ireland Brexit Ready’ roadshow, with more than 1,000 businesses due to attend a conference in the Convention Centre in Dublin on Thursday.

A seminar in Monaghan last Thursday, where three Government ministers heard that many Border firms had changed suppliers and have diversified to offset Brexit, was attended by 400 businesses.

Yesterday, Ms Fairbairn said the “speed of negotiations is being outpaced by the reality firms are facing on the ground”, adding a no-deal outcome will have severe implications for people’s livelihoods.

“Unless a withdrawal agreement is locked down by December, firms will press the button on their contingency plans. Jobs will be lost and supply chains moved,” she said. “The knock-on effect for the UK economy would be significant. Living standards would be affected and less money would be available for public services.”

Almost six out of 10 firms said they had formulated contingency plans, with one in five stating that the latest date to halt further implementation of contingency plans has already passed. Some 80pc of firms said that Brexit has had a negative impact, with almost seven out of 10 firms stating that Brexit has had an impact on the attractiveness of the UK as a place to invest.

“Uncertainty is draining investment from the UK, with Brexit having a negative impact on eight in 10 businesses,” said Ms Fairbairn.

The CBI said many firms won’t publicise their investment decisions, yet their impact will show in lower GDP years down the line.

The latest CBI Brexit preparedness survey was carried out between September 19 and October 8.

Article Source: http://tinyurl.com/kbwqb42

Big pay day for crisis-era Irish bondholders

STEEL-nerved investors who bet that Ireland would not default in the worst days of the eurozone crisis got to collect their reward yesterday.

Holders of the last bonds issued by the Irish government before the 2010 EU/IMF bailout were repaid yesterday, in full and on time. That was in doubt through much of the crisis period, when the bonds traded at steep discounts.

The €1bn of debt was issued to investors in September 2010 at a yield – effectively the borrowing cost – of 6.023pc. The bailout deal was struck months later, as the State’s cost of borrowing on the markets became unaffordable.

The original bailout loans carried interest rates of more than 5pc, but were later slashed. Bonds that had already been issued continued to trade at knockdown prices. In July 2011, at the nadir of the eurozone debt crisis, the €1bn of September 2010 bonds could have been bought for €566m.

The implied yield at that point was 14.732pc. The State did not have to pay that ruinously high interest as the yield was a function of the price bonds were traded on the market.

Bondholders who bought at that price were paid the cash interest of 4.5pc a year – around 31.5pc in cumulative interest since mid-2011. Yesterday the bonds were repaid in full, including to those who bought them at close to half of the face value.

During the life of the bond Ireland’s credit rating fell from AAA to BBB+ with S&P and Fitch, and fell further to junk with Moody’s. It is currently rated A+.

Article Source: http://tinyurl.com/kbwqb42

Minister confirms changes in scheme to help SMEs

THE Government’s new Finance Bill has confirmed a €50,000 increase in maximum value of share options that can be granted under its Key Employee Engagement Programme (KEEP), to €300,000 in any period.

It had previously been subject to a limit applied in a consecutive three-year period. The scheme, introduced a year ago, was intended to help SMEs to attract and retain talent in a competitive labour market.

But it’s been woefully unsuccessful, prompting Finance Minister Paschal Donohoe to make amendments to it in this month’s Budget.

He acknowledged during his Budget speech that take-up of the scheme had been less than expected and he was “taking early action” to address it.

The new Finance Bill also confirmed that the maximum annual market value of share options that can be granted to an employee or director in any one year can now be the equivalent of up to 100pc of salary.

A €3m overall limit remains for companies on the value of share options they can allot under the KEEP programme, while employees are not restricted from entering into future KEEP arrangements with future employers.

Under the KEEP incentive, gains realised on the exercise of qualifying share options granted between January 1, 2018, and December 31, 2023, will not be subject to income tax, USC or PRSI. In order to qualify for KEEP, an option must be exercised within 10 years of grant.

Gains are subject to capital gains tax on disposal of shares, however.

Article Source: http://tinyurl.com/kbwqb42

Dublin Port to speed up investment as growth exceeds all expectations

An expected 3.3pc annual growth rate at Dublin Port established just six months ago by the facility to determine its infrastructure requirements for the next two decades is already being exceeded.

The chief executive of Dublin Port Company, Eamonn O’Reilly, said the current pace of growth means the semi-state firm now needs to speed up investment.

New figures show that cargo volumes at Dublin Port have continued to rise as the economy improves, with total volumes up 4.7pc to 28.4m gross tonnes during the first nine months of the year. Imports rose 6pc and exports were 3pc higher.

Mr O’Reilly said that the facility has witnessed an “extraordinary” rate of growth, with volumes of cargo through the trade gateway having risen 36pc in the past six years.

“This rate is outstripping our long-term master plan growth rate of 3.3pc per annum and underpins the need for us to accelerate our capital investment programme to ensure that Dublin Port has sufficient capacity for future growth,” he said.

The CEO also confirmed that Dublin Port has begun construction of “primary border control infrastructure” to ensure that the facility is prepared “for whatever Brexit might throw at us”. Earlier this year, Dublin Port published a revised master plan where it based future expansion requirements based on a new 3.3pc expected rate of annual growth. It had previously forecast annual growth of 2.5pc, a figure that had been set in 2012.

Mr O’Reilly pointed out that this year, €132m is being invested in Dublin Port under its 2040 master plan.

“After decades of underinvestment in port infrastructure, we need to invest €1bn in the next 10 years,” he said.

Mr O’Reilly added that the company is continuing work on its Alexandra Basin redevelopment and will soon bring its second major strategic infrastructure project plans to An Bord Pleanala.

The latest figures for the port show that imports rose 6pc to 16.9m gross tonnes in the third quarter of 2018, while exports were 3pc higher at 11.5m tonnes.

“Having come through the worst of recessions from 2008, our volumes are already 23pc higher than they were in 2007,” said Mr O’Reilly. “In the timescale of port infrastructure projects, we need to press ahead with our infrastructure projects notwithstanding the uncertainties of Brexit.”

Article Source: http://tinyurl.com/kbwqb42

Half of female bosses can’t get funding, finds new report

More than half of companies led by women have no external funding at all, compared with 30pc of male-led businesses – and three times as many female business leaders regard access to capital as their biggest challenge.

The results are from EY’s Global Growth Barometer, based on a survey of 2,766 senior business leaders.

In the report, advisory firm EY said the lack of access to funding matters in particular to high potential, early stage businesses. When such companies fail to secure funding they have a harder time scaling up, it noted.

The statistics for venture funding of early-stage companies are especially stark – in 2017 97pc of venture funding globally was invested in companies headed by men. The research also found that one in five women CEOs have no plans for raising capital, compared with just 3pc of male CEOs.

Perhaps to compensate, companies led by a woman are more likely to seek growth through collaboration with external partners.

The findings are announced in Ireland to mark National Women’s Enterprise Day, which aims to highlight the contribution of female entrepreneurs and to encourage more women to start their own businesses.

Almost three times as many women as men say funding is the most significant factor in building their company’s agility (17pc versus 6pc), while 17pc believe the cost and availability of equity finance is the greatest barrier to growth, compared with 11pc of male peers.

Article Source: http://tinyurl.com/kbwqb42

Rising interest rates are expected to cool the market for wind farms

Wind farm prices may have peaked, one of Ireland’s most experienced corporate financiers has warned, despite strong overseas demand for a range of Irish assets.

IBI chief executive Tom Godfrey said wind farm assets were probably “as expensive as they’re going to be” now that the low interest rate environment had begun to change.

Rising official interest rates, so far largely in the USA, were prompting investors to rethink strategies, both because returns on relatively safe bond investments were rising to attractive levels and because a rising interest rate environment would ultimately drive up borrowing costs and therefore put downward pressure on asset prices.

The comments follow a number of big Irish sales which include last month’s deal, when IBI advised Coillte on the disposals of its stake in four wind farms to Dublin-listed Greencoat Renewables for €136m.

Meanwhile, Mr Godfrey, speaking at an event to mark a year since IBI’s management buyout from Bank of Ireland, said the Irish market for mergers and acquisitions had held up despite the uncertainties of Brexit.

Private equity buyers attracted into Ireland by the favourable economic backdrop were fuelling “unprecedented” demand for Irish assets, and there was little evidence that Brexit has dented that, he said.

The Irish market had been transformed since the crash by a wave of new debt and equity providers; giving buyers more options and greater flexibility to structure deals.

Mid-market activity (€5m to €250m) was “extremely robust” and valuation expectations among sellers remained high, he said.

Article Source: http://tinyurl.com/kbwqb42

Budget picks

Budget 2019 didn’t put much money back into our pockets. Much of the focus of Finance Minister Pascal Donohue last Tuesday was on housing and health – with little left in the pot for anyone else. Many of us will only be better off to the tune of about €5 or €6 a week next year as a result – and some of us won’t be any better off at all. Here are some areas where we’re still losing out financially and which the Budget could have tackled better.

SQUEEZED MIDDLE

The €750 increase in the amount which people can earn before getting hit for the higher rate of income tax has not addressed the issue of high income tax rates kicking in too early “in any substantive way”, according to Pat O’Brien, tax director with Ernst & Young (EY). Budget 2019 increased the amount that a single person can earn before paying the higher rate of tax from €34,550 to €35,300 – and from €43,550 to €44,300 for married couples where only one spouse is working.

“The biggest issue for those on median incomes remains the rapid progression to the 40pc top income tax rate,” said O’Brien. “The proposed increase of €750 to €35,300 does little to address this. By comparison, a single individual in Britain would have to earn more than £46,350 (€52,845) before paying the higher tax rate when personal allowances are taken into account. Working people will still reach the highest income tax rate on relatively modest levels of income.”

Average Irish earnings stand at about €38,700, according to the latest official figures – so people on an average wage will still get hit for the higher rate of income tax next year, despite Budget 2019.

KIDS’ INHERITANCE

Many children will still get stung for inheritance tax bills of tens of thousands of euro or more over the next year because the only change introduced by Budget 2019 in this regard was a token one.

Last Tuesday’s Budget increased the value of gifts or inheritances which children can get tax-free from their parents over their lifetime by €10,000 – to €320,000. “This exemption could have been increased more without much damage to the State finances,” said Michael Gaffney, a tax expert with KPMG. “I think increases in house prices, combined with the passing of the baby boomer generation, means the yield from inheritance tax will be higher than expected.”

In early 2009, a child could inherit up to €542,544 from his parents over his lifetime – and the rate of inheritance tax charged back then was 22pc. On top of the dramatic reduction in the amount which can be inherited by children tax-free since then, the rate of inheritance tax charged today is 33pc.

“In early 2009, a child inheriting a family home valued at €500,000 would pay no inheritance tax – compared with an inheritance tax liability of just under €60,000 today,” said Alison McHugh, director of private clients with Deloitte. “The Government needs to make a bolder move to increase the inheritance tax threshold so they are brought more in line with where they were ten years ago. With the average asking price for a Dublin home being about €375,000, most transfers of family homes to a single child will be within the inheritance tax net.”

LOST TAX BREAKS

A raft of tax breaks, such as the reliefs on trade union subscriptions, bin charges and medical expenses, have been either abolished or curtailed since the first austerity budget. These reliefs were worth hundreds, if not thousands, of euro to taxpayers.

Given that employment is at record highs, and that Ireland is forecast to record the highest economic growth in Europe this year, surely Minister Donohoe could have found room to reverse some of the tax break cuts of recent years.

One of the most valuable tax breaks was the relief on medical expenses. Before 2009, you could claim back 41pc of the cost of certain medical expenses in tax relief.

That tax relief was chopped to 20pc in 2009 and it has remained at that rate since. The GP visit card has helped alleviate the cost of doctor visits for many elderly – and for the parents of children under the age of six. However, many people are still facing crippling medical bills. An increase in the rate of tax relief on medical expenses would help people cope with those bills – or afford quicker medical attention.

Budget 2019 changes in the Drug Payment Scheme, a Government scheme which can help curtail medical bills, will certainly help those who regularly face high medical expenses. This scheme is aimed at individuals and families who don’t have a medical card and who normally have to pay the full cost of their medication.

From this January, the cost of buying prescribed drugs or medicine under the Drug Payment Scheme will be no more than €124 a month – as under Budget 2019 the monthly cap will be cut from €134 to €124. Ten years ago however, the cap was set at €90 – so there is still much room for improvement here.

There have been plenty of other changes to our tax system in recent years which have taken money out of our pockets. The tax relief on bin charges was abolished in 2011. Given that many households have seen a substantial increase in their bin charges since, a restoration of that tax relief would help ease the pressure on households.

In 2011, the tax relief on professional subscriptions was abolished. This tax relief was available to workers whose role required them to be members of a professional body and who paid an annual subscription to retain their membership. “Restoration of the relief for professional subscriptions would have been welcome,” said O’Brien. “This issue affects a vast range of employments from human resources to finance to IT. For many workers, being in membership of a professional body is the modern equivalent of the ‘tools of the trade’.”

DRIVERS

Workers who have been given electric cars or vans by their employers could face a tax bill next year, depending on the value of the electric vehicle. This is due to changes in the way benefit-in-kind – the tax which employees pay on non-cash benefits received from their employer – is treated for electric vehicles.

In 2018, employees did not have to pay any BIK if they had a company car which was also an electric car, regardless of the value of the vehicle – because a 0pc BIK rate was in place for electric cars or vans. In Budget 2019, Minister Donohoe extended the 0pc BIK rate for electric vehicles for a period of three years. However, he also put a cap of €50,000 on the original market value of electric vehicles which qualify for this rate. No such cap was in place in 2018. This €50,000 cap means that many employees will now face a BIK bill – unless their employer gives them an electric car worth less than €50,000.

To truly encourage the takeup of electric cars, the Minister should consider removing this cap.

From this January, buyers of new diesel cars will face a higher Vehicle Registration Tax (VRT) bill than they did previously – due to the 1pc VRT surcharge introduced under Budget 2019.

“For those workers who commute long distances, diesel cars remain the optimum choice and many are forced to upgrade their car due to high annual mileage,” said Robert Dowley, partner with KPMG. “The 1pc VRT surcharge on diesel cars will have an impact when they upgrade their car.”

PARENTS

The cost of sending a child to college has become one of the biggest financial challenges facing many parents. The total bill could come to more than €50,000 – if the child is living away when home and attending college for more than four years. At €3,000 a year, the student contribution charge alone accounts for about a quarter of the college bills faced by parents, according to the latest cost of student living survey by the Dublin Institution of Technology.

The student contribution charge has increased steadily over the years -with some of the biggest hikes occurring during the recession and in the early Noughties. Twenty years ago, the charge (whose name has varied over the years) was only €330. The tax relief on tuition fees allows parents to claim back up to a fifth of the cost of the student contribution charge, but only for any second or subsequent children in third-level education.

Many parents therefore lose out on the chance to claim this tax relief – particularly if the age gap between their children is wide or if they have only one child. Were it possible to claim the tax relief on the student contribution charge for the first child in third-level education, this could make this tax break more accessible to parents – and ease the burden of college bills. To prevent the tax relief becoming a runaway bill for the Government, a limit could be put on the amount of relief claimed by the same family.

Another change in recent years which has put parents at a disadvantage is the taxation of maternity pay. Since July 2013, State maternity pay has been taxed. State paternity pay, introduced in late September 2016, is also taxable.

Despite the upcoming increases in maternity and paternity pay, Irish parents would find it very hard to make ends meet if relying solely on those benefits during maternity or paternity leave. For this reason, the taxation of this benefit seems unfair – particularly for those who don’t get their State maternity pay topped up by their employer when on leave. (Employers are not obliged to pay women who are on maternity leave).

For stay-at-home parents, next year’s €300 increase in the home carer tax credit is welcome.Budget 2019 also had some good news for those families with two parents who work outside the home: more of these families are set to get childcare subsidies next year. This is due to an increase in the maximum net income a family can earn to be eligible for subsidies under the Affordable Childcare Scheme.

However, “in our view, this change does not go far enough to encourage parents back into the workforce where they are faced with expensive childcare costs”, said McHugh. “The Government should consider the introduction of a child tax credit such that all parents – whether working in or outside the home – will be treated equally.”

As the old cliché goes, a lot done, more to do…

BUDGET PICKS
PENSIONERS

State pension to increase by €5 a week from March 2019.

Full Christmas bonus to be paid this December.

SELF-EMPLOYED

Extension of the Jobseeker’s Benefit scheme to self-employed from late 2019.

The earned income tax credit to increase by €200 to €1,350.

PARENTS

Two weeks’ paid parental leave for each parent – from November 2019.

Home carer tax credit to increase from €1,200 to €1,500.

WORKERS

National minimum wage to rise from €9.55 an hour to €9.80 an hour from the start of next year.

Small cut in the Universal Social Charge for earnings of between €19,874 and €70,044.

An increase of €750 in the income tax standard rate band – from €34,550 to €35,300 for single individuals; and from €43,550 to €44,300 for married one-earner couples.

HOTELS, HAIRCUTS & EATING OUT

The price of eating out – and staying in hotels – is set to increase next year due to a 50pc rise in the Vat rate on tourism activities. Hotels and restaurants will have to charge 13.5pc Vat next year. The cost of a haircut is also likely to increase.

CIGARETTES

A 50c increase in the excise duty on a packet of 20 cigarettes.

Article Source: http://tinyurl.com/kbwqb42

Irish food supplier Greencore to sell entire US business for €927m

Irish food-to-go supplier Greencore has reached an agreement to sell its entire US business to Hearthside Food Solutions for £817m (€927m).

Greencore said it will hand a large part of the proceeds to shareholders via a special dividend of £509m, or 72 pence per ordinary share.

The group said that the deal will also “support a strengthened balance sheet”, with up to £293m helping to reduce leverage.

The transaction EV / EBITDA is a multiple of 13.4x/14.2×2,3.

Hearthside is a scale US contract food manufacturer with a heritage in US food industry outsourcing.

Greencore’s CEO, Patrick Coveney, said that the proposed sale represents “compelling and immediate realisation of value” for company shareholders.

“We have always had a firm conviction on the underlying value and growth prospects of our US business and believe that this offer fully reflects that,” he said.

The intention post-transaction is that Greencore will have greater financial and strategic flexibility in its core UK market, with potential for dynamic capital management.

Looking ahead, we are confident that we can deliver further growth and returns in the dynamic UK market,” said Mr Coveney.

“The proposed transaction would enhance our strategic and financial flexibility, which would allow us to build on our industry-leading position in our core UK market whilst also taking advantage of emerging organic and inorganic growth opportunities.”

Completion of the deal is expected by late November 2018, conditional on approval of Greencore shareholders and US HSR clearance.

Article Source: http://tinyurl.com/kbwqb42

Brexit the big cloud in bank’s forecasts for jobs and growth

THE Central Bank has laid out a rosy economic forecast, with continued growth and tens of thousands more people in work over the next three years.

However, it warned that a hard Brexit would damage the country – and even a soft Brexit would slow growth substantially for an economy that is more exposed to Britain than any other.

The bank said a no-deal Brexit would potentially reduce growth by 2.75pc after five years and reduce by 40,000 the number of new jobs that could be created compared with a scenario where Britain stayed in the EU. Even a “soft Brexit” would knock 1.7pc off growth.

The bank’s central forecasts upgraded this year’s growth forecast to 7.2pc and 2018 to 6.7pc, while its initial estimates for 2019 and 2020 see growth tapering to 3.7pc in the final year. Successive years of economic growth will push the unemployment rate down to 4.7pc and should boost wage growth, it said.

The numbers reflect a Brexit deal being struck and the trading relationship with Britain remaining unchanged as a result through the forecast period to 2020.

“If the worst case scenario was to evolve then you would expect significant downward revisions to the 2019 and 2020 figures,” Mark Cassidy, the bank’s head of economics and statistics, said yesterday.

The bank’s forecasts -ex-Brexit – were broadly in line with those given by Finance Minister Paschal Donohoe in this week’s Budget, although it said it had advised the Government to move faster to a budget surplus to alleviate the risk of overheating.

Mr Donohoe has said he would run a balanced budget from 2019 after a small deficit in 2018 in fiscal plans that were widely seen as paving the way for an election.

With monetary policy set in Frankfurt for the whole eurozone, Ireland has few options apart from the budget to rein in economic overheating.

The Central Bank has already put in place measures to curb the property market. Yesterday Mr Donohoe told Independent News & Media’s 2019 Budget Breakfast that his decision to raise Vat on the tourism sector showed he was not afraid of making difficult decisions.

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