CACM Accountants — Certified Public Accountants

Download the CACM Accountants 2010 Budget Summary HERE

The toughest Budget in the History of the State was announced yesterday by Finance Minister Brian Lenihan. Its contents did not come as much of a surprise as it seems to have been the most leaked budget in years.

The Department of Finance had estimated expenditure for next year to increase by €5billion before the government applied the cuts of an estimated €4 billion. All through 2009, many businesses have had to review their current business structures and adapt to the changing needs and requirements of existing and potential customers and clients. Not always an easy task as difficult decisions had to be made.

Most businesses have cut costs to the core while trying to maintain their competitiveness. As anticipated, there were no changes in the income tax rates for 2010. On the outset this may appear to be good, however the introduction of the new Carbon Tax of €15 per tonne will obviously lead to an increase in costs. The tax will be applied to petrol and diesel immediately. The tax on home heating fuels will be introduced in May next year, pretty much cancelling out the announcement of gas prices of 8% on Tuesday. The reduction in the standard rate of VAT from 21½% to 21% is trivial and feels like a goodwill gesture thrown in by the Minister as a token effort to help businesses compete with their counterparts in the North of the Country. Amore significant decrease or a re-structure of the VAT bands and increases in the thresholds amounts would have been welcomed and more proactive in stimulating business.

Those in the hospitality industry will surely be happy with the reduction in excise duties on alcohol as will the motor sector with the introduction of the new scrappage scheme. Changes in Social Welfare in particular the decrease in child benefit of €16 a month will not ease the strain on working parents faced with continuing child care costs. While not introduced in this budget, the Minister did indicate that a property tax and water charges is on the cards for next year. It will be interesting to see how the appointment of an Ombudsman to review the cases of small businesses that are refused bank loans will operate in practice. For 2010 businesses must continue our innovative efforts in adapting the ways we do business in order to meet the changing needs and requirements of our customers to overcome the impact of the budget on our businesses.

Of course we will keep you up to date regarding any future budget news. If you require further information on any of the topics covered here, please do not hesitate to contact us . on 021 4217474 Thank you

CACM Accountants strive to offer the best possible service for its clients. With vast business experience, across many business sectors, we will always keep our clients at the heart of our firm.

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