How will Budget 2023 impact on you? 

Budget 2023 By David Crean

Budget 2023 aims to target the inflation and cost of living crisis that the country is facing. With businesses and households both apprehensive about the economy and managing their costs going forward, it’s important to look deeper into some of the individual measures to assess what their impact might be.

How does Budget 2023 help business?

With much local and national attention on the large energy bills that businesses have been receiving, it is probably no surprise that one of the main supports announced for businesses is the ‘Temporary Business Energy Support Scheme’ (‘TBESS’). With a cap of €10,000 a month, it’s evident that this is targeted at small and medium-sized enterprises. It is being administered through the Revenue, which means businesses should talk to their accountant/tax advisor to see if they will qualify. While the exact details of the roll-out are not yet available, businesses will qualify if the unit price they pay for energy has increased by 50% compared to the corresponding period in 2021, and if they qualify, the business will receive a payment of 40% of the increase.

There are mixed fortunes when it comes to VAT, with the reduced rate of 9% on electricity and gas extended to the end of February 2023. However, there will be much disappointment in the hospitality sector as the reduced VAT rate of 9% is to revert to 13.5% in March 2023.

One of the other measures that jumps out is the Small Benefit Exemption. Many employers will be familiar with this scheme, where a €500 voucher can be paid to employees annually, tax-free. The Budget has increased this to €1,000, and also allows this over two vouchers in the year.


How does Budget 2023 impact individuals?

There are changes to the standard rate band for income tax, USC thresholds, minimum wage and tax credits. Below are some practical examples of how people will feel these changes in their pockets:

  • A single person (with no children) earning €45,000 a year will be better off by approx. €16 a week
  • A single person on minimum wage will benefit by approx. €24 a week
  • A married couple with two children and one income of about €35,000 will be better off by approx. €20 a week
  • A married couple with two children and two incomes (approx. €85,000 between them) will have an extra €32 a week.


Have actions been taken to help the housing market?

Due to the issues facing the housing market, if it wasn’t for the current inflation and energy crisis, it would have gotten a lot more attention.

For first time buyers, the Help to Buy and the Residential Development Stamp Duty refund schemes have been extended yet again, to the end of 2024 and 2025 respectively. For anyone renting a home, there is a newly introduced rental tax credit of €500 per year.

For landlords, there is an increase of pre-letting expenditure relief from €5,000 to €10,000, and the time limit for which a property must be vacant is halved to 6 months, which should encourage a return of rental properties to the market at a faster pace. The vacant homes tax will also be introduced in 2023 for homes that have been occupied for 30 days or less in a 12-month period.


What Social Welfare measures have been taken?

There will be a standard €12 increase in social welfare from the 1st of January 2023, but in addition to this there are a number of once-off measures announced between now and the end of the year. These include once off additional payments of Fuel Allowance, Living-alone Allowance, Children’s Allowance, the Carers Support grant, those on the Working Family payment and early payment of the Christmas Bonus.

For example, a single pensioner, living alone, in receipt of Fuel Allowance will receive an additional €2,375 between now and the end of 2023.


What’s there for farmers?

An extension has been granted from 2022 to 2025 for the following key relief measures:

  • Young Trained Farmer Stamp Duty Relief; 
  • Farm Consolidation Stamp Duty Relief;
  • Farm Restructuring CGT relief;  
  • Young Trained Farmer stock relief; and 
  • Registered Farm partnership stock relief.

It should also be noted that, for the second year in a row, the Flat Rate farmer addition has been reduced, this time from 5.5% to 5%.

Overall, there are many positives to take from Budget 2023, but whether they are sufficient to avert the crisis of a recession remains to be seen.

David Crean, ACA.

Crean & Co are an accounting firm based in Roscommon Town. For any queries, email or visit our website