Thursday 18 January 2018

Finance Bill: Battling families dealt €1,000 blow

Minister Brian Lenihan, who yesterday delivered the Finance Bill to the Dail
Minister Brian Lenihan, who yesterday delivered the Finance Bill to the Dail

FAMILIES face the prospect of having to shell out an extra €1,000 after a swathe of crippling charges and stealth taxes was announced in yesterday’s Finance Bill.

The combination of mortgage hikes and higher income taxes imposed in the past three Budgets, along with the extra charges announced yesterday, are likely to cost an average family up to €1,000 a year.

The bill contained a range of stealth charges proposed just two months after a savage Budget cut public sector pay and reduced social welfare payments.

Private sector workers had thought they had largely escaped in the last Budget, but the swingeing measures contained in the Finance Bill will leave all consumers reeling.

The bill proposes an extension of the new carbon tax that will see a tankful of domestic heating oil rise by €43, domestic gas prices rise by an average of €41 a year, and tolls on the M50 and the Dublin Port Tunnel are to rise by one-fifth.

Householders will also lose tax relief on bin collection charges worth €80 a year. This is to go from the end of next year.

Bin collections by local authorities will rise by 13.5pc from July as county councils will have to pay VAT for the first time. Private bin collectors already pay VAT.

Going for a swim in a local authority swimming pool will also be dearer from the summer, as will car parking provided by local authorities and the as will car parking provided by local authorities and the use of a county council gym.

But there is a slight extension in the deadline for removing mortgage interest relief, which means anyone who buys a house in the next two years will still get the tax relief.

The imposition of carbon tax on domestic heating oil from May means it will cost an extra €43 to fill a 1,000-litre oil tank.

Domestic gas charges are set to rise by 6pc from May 1, sending the average household bill up by €41 over a year. The move will partly remove the benefit of recent gas price cuts, as the average annual bill is set to rise from €680 to €721.

The maximum toll for using the Dublin Port Tunnel will shoot up from €10 to €12.10, while the toll on the controversial M50 is set to rise from €3 to €3.63 if the full 21pc VAT charge is imposed by the Government.

The Finance Bill, which will give legal effect to the measures in last December's Budget, will also see the carbon tax eventually extended to coal and peat.

Department of Finance officials were not able to give a firm date for when that part of the tax would be imposed yesterday.

However, they confirmed the cost of most services provided by the country's local authorities was set to soar.

Consumers will have VAT of between 13.5pc and 21pc imposed on services such as bin collections, car parking, swimming pools, the hiring of sports facilities and commercial water provision.


Local authorities will be forced to add 13.5pc to the charge for bin collections from July.

The European Court of Justice recently found against Ireland over the failure of public bodies to charge VAT for services they provide.

This is because private companies competing against local authorities by providing bin collections and other services are forced to charge VAT.

Imposing VAT on Fingal County Council's bin charges, for example, would see the annual charge rise from €110 to €124.85, while a per-bin charge would rise from €8 to €9 if the full VAT charge is passed on to householders.

However, Department of Finance officials insisted many local authorities may not pass on the full VAT charge to consumers as they will be able to claim back some of the VAT payments.

There was some relief for those paying into a pension when Finance Minister Brian Lenihan reversed a previous move to impose a 1pc levy on pension payments.

The minister does not want to discourage people from investing in pensions.

And mortgage interest relief will last for six months longer than the timeframe announced in December's Budget.

Anyone buying a house for the next two years will now get the relief until the end of 2017.

Fine Gael finance spokesman Richard Bruton said the new taxes would fall hardest on households in Dublin, where VAT will be applied on the East and West Link toll roads and on bin charges by local authorities for the first time.

He said this would cost families up to €350 a year.

Labour's Joan Burton said the measures in the bill would mean extra hardship for most families and households.

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News