Brian Keegan: Taxpayers get little from thin Finance Bill harvest
If the tax year had a harvest season, we are in the middle of it. The October budget is immediately followed by the publication of the Finance Bill.
This is the piece of law designed to give legal effect to the budget, and it was published last week.
There are few enough measures in the bill this year of interest to taxpayers generally which we didn’t already hear in the finance minister’s budget speech.
Good news rarely gets buried in the fine print, so the fine print of the Finance Bill typically contains bad news.
For instance, there is a new rule to ensure that short-term lettings, such as those arranged via Airbnb, don’t benefit from the tax exemption granted under the Rent-a-Room scheme.
Rent-a-Room was aimed particularly at the student digs market.
It provides an exemption from tax for income up to €14,000 from renting a room in your house, and the exemption can also cover providing meals and laundry services.
A new “28-day rule” confirms the existing Revenue interpretation that Airbnb lettings were not exempt from tax.
The room must be let out for a period of at least 28 days if the income is to qualify from the exemption, or if it is clear that the room is being let in the student or five-days-a-week markets.
But it’s not all bad news.
Some farmers will benefit from the relaxation of the income averaging rules, and stamp duty relief for young trained farmers is extended to 2021.
The tax exemption for compensation paid to unfortunate people who were affected by the Magdalen laundries is extended.
There are modest improvements to existing tax relief for investing in SMEs and promoting the film industry.
The availability of an existing three-year tax holiday for new companies is being extended to 2024.
In some instances, even where there is a small change, clearance from Brussels is required.
Even though improvements such as the regional boost for filmmakers are now on the statute books, they may not take effect for some time, if at all.
The most significant items in this bill are perhaps those which aren’t there.
There are no new incentives to develop the property construction or rental market at a time of crisis in the housing sector.
One existing measure, the Home Renovation Incentive scheme, due to expire at the end of this year, has not been extended.
Industry groups had been looking for improvements to the capital gains tax regime for entrepreneurs, and this did not figure either.
An opportunity to correct a defect in the law which created a tax trap for individuals in a management buyout has been missed.
Anyone looking for help or support in the Finance Bill in dealing with Brexit will be disappointed.
This may perhaps be explained by the Government’s obvious reluctance to be seen to be anticipating possible outcomes of negotiations which have yet to conclude.
Nevertheless, no matter what outcome there will be, some preparation is necessary.
For instance, there was no sign of measures to simplify or defer the collection of Vat on imports from the UK when that country leaves the EU.
Such arrangements are already commonplace in several EU countries and could have been introduced without prejudice to any Brexit deal.
If the budget measures were modest, the Finance Bill is modest to the point of being reclusive.
Taxpayers seem to be at the back of the queue when it comes to the allocation of resources from this particular tax harvest.
