Finance Bill 2023 (the Bill) published on 9 March includes the legislative provisions for the tax measures announced as part of the Government’s recent Cost-of-Living package.

The Bill is brief, especially when compared to the more normal Finance Bills, and provides for the additional proposed changes to the Temporary Business Energy Support Scheme (TBESS) and VAT changes as well as some amendments in relation to the agriculture sector.  The temporary changes announced to the Benefit in Kind (BIK) calculations for company vehicles are expected to be included at Committee Stage of the Bill.

Temporary Business Energy Support Scheme (TBESS)

A number of changes to the TBESS were introduced by way of Ministerial Order; extension to 30 April 2023, and increases in the monthly aid limits.  In addition to these changes, a number of further enhancements to the scheme are provided for in the Bill; subject to State Aid approval. 

  • The Bill provides for an extension of the scheme to 31 May 2023 with an option to further extend to 31 July 2023.
  • The energy cost threshold is to reduce from a required 50% increase in average unit price of electricity or gas, to a 30% increase. This will apply from 1 September 2022.
  • The amounts payable under the scheme will increase from 40% to 50% of the uplift in the electricity or gas bill as compared to a bill amount in a reference period from 1 March 2023.
  • The time limit for making all claims under the scheme is to change to no later than 2 months from the end of the specified period, essentially within 2 months of the end of the scheme.

Read our insight on the changes to the TBESS

Value Added Tax (VAT)

  • The Bill provides for the extension of the 9% VAT rate for the tourism and hospitality sector until 31 August 2023.
  • The extension to the temporary reduction to 9% on domestic electricity and gas supplies until 31 October 2023 is provided for.
  • There is also provision for the VAT treatment of the supply of certain Covid-19 in vitro diagnostic medical devices.

Benefit in Kind (BIK) on Company Vehicles

The temporary measures announced this week to BIK on company vehicles are expected to be provided for at Committee Stage of the Bill.  The key changes announced and effective for 2023 are:

  • Original Market Value (OMV) of category A-D cars and vans will be reduced by €10,000
  • The existing 2023 deduction from OMV for electric vehicles will be increased from €35,000 to €45,000
  • The upper limit in the highest business mileage band will be reduced by 4,000kms to 48,000kms

Read our insight for further information on the changes to BIK on company vehicles

Agri sector

The Bill includes a number of amendments relating to the agricultural sector.

The main amendments include:

  • Extension of Farm Restructuring (CGT) relief to 31 December 2025.
  • Extension of Young Trained Farmer Stock Relief 31 December 2024.
  • Extension of Registered Farm Partnership Stock Relief to 31 December 2024.
  • Extension and amendment of the publication requirements of the accelerated capital allowance relief for capital expenditure on slurry storage (Section 658A of TCA 1997) to 31 December 2025.
  • The amendment of the publication requirements for the accelerated wear and tear allowances for farm safety equipment.
  • Stamp Duty Young Trained Farmers Relief is to be extended to 31 December 2025 and the allowable period after acquiring land to qualify for the relief, is to be reduced from 4 years to 3 years.

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