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Budget 2023: Verdict for Self Employed Tradesmen

Budget 2023: Verdict for Self Employed Tradesmen

With so many feeling the pressure in their wallets due to the rising cost of fuel, the rising cost of food, and the general effect of price increases, the Irish Government’s 2023 budget aims to reduce the financial burden on tradesmen and trade professionals businesses.

 

 

Here is a summary of what self-employed tradespeople can expect from the 2023 Budget:

  • €3,200 increase in the standard tax rate cut-off point, plus an increase in personal tax credit, self credit and USC charges
  • Energy credits of €600 plus the introduction of the Temporary Business Energy Support Scheme
  • Excise cuts on petrol marked gas oil and diesel, and the VAT rate on electricity and gas extended until February 2023
  • 10% levy introduced on concrete blocks and pouring concrete
  • Vacant Home Tax & Refurbishment grant opportunity
  • Low-cost loans for domestic home energy retrofits
  • Apprenticeship Allowance

 

Taxes

Changes to income tax bands, USC rate bands and personal tax credits have been used to bump up workers’ take-home pay.

An increase of €3,200 in the income tax standard rate cut-off point for all earners, from €36,800 to €40,000 for single individuals and from €45,800 to €49,000 for married couples / civil partners with one earner.

  • An increase of €75 in the Personal Tax Credit from €1,700 to €1,775
  • An increase of €75 in the Employee Tax Credit from €1,700 to €1,775
  • An increase of €75 in the Earned Income Credit from €1,700 to €1,775

There have been no changes to the PRSI rates for the self-employed.

As a quick calculation, a self-employed trade pro (married, one income) earning a net income of €56K in 2023 (€80K gross income), will be just over €900 better off.

Changes to tax credits will apply from January 1st, 2023.

Verdict: With income bands for the highest rate of tax expanded, at a minimum, the average trade pro will receive at least €500 a year of savings.

 

Energy Credits & Temporary Business Energy Support Scheme (TBESS).

Electricity credits for all households totalling €600 are to be paid in three instalments of €200, with the first due before Christmas, with two further instalments next year.

If you have experienced more than a 50 percent increase in your energy cost as an operating business you may qualify for the Temporary Business Support Scheme. Full details are yet to be announced - but the scheme will cover 40% of a business's energy costs up to €10K.

Verdict: Budget 2023 claims to support small businesses with energy inflation. If you qualify, there is support there to assist. As the saying goes... every little bit helps.

 

Petrol and Diesel Prices

The cut on fuel duty has been extended to February 28, 2023 meaning that petrol and diesel prices shouldn't be rising astronomically as they did in the first six months of the year.

The carbon tax was introduced, raising prices by 2c per litre - but is offset by a reduction of the National Oil Reserves Agency levy, meaning prices will not go up at the pumps.

The excise reduction translates to 21c per litre of petrol and 16c per litre of diesel.

Verdict: Extending the reduction of excise duty on petrol and diesel is welcomed, but with no intention to keep the cuts on motor fuels in place indefinitely, increases in fuel are inevitable.

 

10% Concrete Tax

From April 3, 2023, a 10% levy on concrete blocks, pouring concrete and other concrete-related products will be applied to the redress scheme agreed upon earlier this year for homeowners affected by defective products used in the building of their homes.

Verdict: This tax will increase costs to the industry, adding further inflationary pressure to house building and the home improvement sector overall.

 

Vacant Home Tax & Refurbishment Grants

The government is introducing a Vacant Home Tax to persuade property owners to get vacant homes and apartments back into use. The tax will be applied to properties occupied for less than 30 days in a 12-month period.

Verdict: Couple this announcement with the Croí Cónaithe (Towns) Fund Scheme grant of up to a maximum of €30,000 now available for the refurbishment of vacant properties for occupation, and there will be a further demand (and opportunity) for trade pros nationwide.

 

 

Low-cost loans for domestic home energy retrofits

The government has earmarked €370M for domestic home energy upgrades as well as new low-cost loans for retrofits to help homeowners manage the non-grant SEAI-aided portion of a project.

Verdict: SEAI Grants and low-cost loans will help encourage homeowners toward energy upgrades and increase renewable energy work for the sector

 

Apprenticeship Allowance

Employers will be eligible for an allowance of 150 percent for all remuneration paid under such an allowance, up to a maximum of five percent of the company’s total wages and salaries bill for 1 year.

Over 4,800 additional places on craft and consortia-led apprenticeships and 4,000 places on craft apprenticeship programmes will be supported.

Verdict: Important progress is being made to address skill gaps in construction and the home maintenance, improvement and repair sector and the 2023 budget continues to build on the Action Plan for Apprenticeship 2021 -2025.

 

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