Club Orange, Sun Beds And Stamp Duty

at | 9 Replies

From top: Watching Tuesday’s budget speech in a Arnott’s; Vanessa Foran

Accountant Vanessa Foran (her off the telly) writes:

By now you will be already familiar with the main contents of Budget 2018.

I’m just going to mention some key items that got my attention; some contractions, some ironic, one that got my agreeing nod and another that deserves its “are ye taking the piss!”

The Vacant Site Levy isn’t quiet the Revenue Generator the Minister for Finance is telling you. In fact, not a single cent has been earned from it yet since Alan Kelly (yes Labour) came up with it. Of course, it’s worth driving it up even further, since that action doesn’t cost them anything and doesn’t consume resources.

But the levy conditions are so wide it is easy to navigate a work-around. Additionally, most of the Sites on the registrar (and for the site to be subject to this levy, it must already be on the Local Authority Register of Vacant Sites) are increasing in value at a far steeper pace than 4%. Dublin and the surrounding commuting areas are already running ahead with double digit growth values.

This moves me easily on to mention the Commercial Stamp Duty rise, also by 4%; and I am advised, also attaches to the Buy-To-Let Stamp. If this is the case, then it is hardly the incentive to attract more Residential Landlords to commit further investments in the rental sector, or even encourage new Landlords into the business.

Since I am on residential letting; HAP. The Housing Assistance Payment has not delivered any additional units into the Private Rental Sector. Not one. No additional Rentals have been created according to the statistics and data.

Yet your Government is laying another €149 million into HAP. However, if no additional properties are becoming available for qualifying Tenants, it will remain unspent. Maybe this is the plan, a pretend spend to announce in the many responses to the Housing Crisis.

I would add to that and say that there was no new Housing Initiative announced beyond NAMA now advising the Commercial Sector. You can digest that at the Private Sector, and let me record again that I strongly disagree with the Private Sector being the supplier of Social Housing.

The top topic now, even before Brexit, is Social Housing. Yet everything we’ve heard in the last 48 hours was announced weeks ago. That part of your Budget was recycled material that was given a new suit.

By the way; Brexit is getting a €3 billion Management fund. Yet our own Rural Affairs barely saw a €13 Million top up. So your Broadsheet-on-the-Telly friend Johnny Keenan may have to wait a bit longer for some decent broadband.

That might be a familiar and handy dig at the lack of investment outside of Dublin. But you simply cannot promote Rural Relocation as an option to Homeless Families unless there is infrastructure that can be relied on.

The same issue applies to Small Businesses and Start-Ups. If there was any genuine interest in decentralising part of the Dublin based activity and business then perhaps part of that €3 billion should have been allocated to a Rural Affairs led Development Fund.

This pretty much sums up the attitude of this Government to the general public to be honest. I have already remarked my disgust at the labelling of workers on the Industrial Wage and below as “Middle Income Earners.”

These are the Working Poor and not the Squeezed Middle that Campaign for Leo would canvas them as.Continued use of this “Squeezed Middle” allowed this Fine Gael Budget give them pretty much nothing that would enhance their day to days.

Yet the Hotel Industry get to keep their cosy VAT rate of 9%. This is my “are you taking the piss.” I am required to collect VAT from my clients, who are most likely insolvent and or at risk of losing their homes, at 23%. Yet anyone can go away for a Spa Weekend in a 5* and only pay VAT at 9%. There’s one contradiction there. A luxury non-essential service is at 9%. And Insolvency is at 23%.

Additionally, and this may not be public knowledge as it doesn’t get into the press releases and spins, but the Hotel Industry already got a full re-Rating (they now pay reduced Rates) and it wasn’t reversed either in this Budget, despite the obvious fact that this industry is clearly back on its feet.

If I had the means I would engage an Economist to study how much the Hotel Industry got to retain as profits because of their reduced Rates; to actually put a price on how much is being denied to their respective Local Authorities.

One thing to trap from this is that the Hotel Industry must have very good Lobbyists working for them.

Here’s another contradiction; the Budget promoted a 5% Unemployed rate to near full employment over the 12 months. This spells out as a possible Labour Shortage to me and yet Employers PRSI was increased.

This is absurd, and will lead to more Contractor arrangements. USC and PRSI, both EE and ER must be overhauled and rebuilt before it is touched again. Continuing with the current yet historic Social Insurance framework is not working and it is not value-for-money for the taxpayer.

Anyway, steam now vented so onto something which will see tangible benefit over the next 12 months. The additional €75 million into a now rebooted National Treatment Purchase Fund (NTPF.)  As a former Hospital Financial Controller, I know this is a magnificent boost, and I promise ye reading this that the NTPF can make a huge impact into those waiting lists.

Incidentally, this was a Fianna Fáil demand as part of the Confidence & Supply agreement with Fine Gael.

At a budget event yesterday, I learned from Sean Fleming TD that this budget is the first balanced budget in 10 years. But don’t get too confident, there is still a National Debt of €44,000.00 sitting on your head. €44k per head. The 2nd heaviest in the world. We are not in debt as much a Japan, although I’m inclined to envy their indigenous industry profile; Toyota, Honda, Nissan etc.

Fianna Fáil will insist that their Confidence and Supply agreement with this Government is bringing Stability to the country, and it is serving the country well by getting more spend into Services, and less into Tax breaks, which is hardly a secret Fine Gael ambition.

I’m not party to any deals made in Leinster House or their Party Offices, but I will say that this Budget is not a pre-election one.

Tinkering around with a fiver here and there, and not adding anything to the pint is about the height of the populist giveaways. However, it is worth me mentioning that your TDs will get to enjoy their pay rises from January 1st while Social Welfare recipients will be waiting until April.

That behaviour really bugs me as an accountant. Everything included and passed by the Dáil in the 2018 Budget should all commence on the 1st January. The top ups now being earned from Tuesdays Midnight, will all be recorded into this Financial Year 2017.

I will sign off with a note of comfort, my additional 200 EITC will at least be enough cover for my Diet Club Orange and Sunbeds over the next year.

I hope to see ye tonight and feel free to ask questions.

Vanessa Foran is a principal at Recovery Partners. Follow Vanessa on Twitter: @vef_pip

9 thoughts on “Club Orange, Sun Beds And Stamp Duty

  1. martco

    Thanks for writing this up.

    I’m no expert here (mind you I don’t think that puts me at any particular disadvantage given the spinnery and lying that goes on amongst the pros) but the one thing that always helps me get the straight picture no matter what is what you wrote there about our €44k per head national debt. In a nutshell that tells you where you’re at just as easily as if you were running an oul coffee kiosk and ran a quick reckoner on your ins and outs for the year.

    Reply
  2. A person

    I’m sorry, not moved to comment much on any web article, but you are completely uninformed. It annoys me that posters can state anything without first checking the facts. The Vacant Site Levy does not kick in until next year. Sites are registered this year by local authorities and the levy is payable next in January 2018 hence the lack of payments to date. And it only applies to sites zoned primarily for residential development.

    Reply
    1. bad@memes

      Nobody ever said whatever you misread.
      isn’t quiet the Revenue Generator…and maybe even…not a single cent has been earned from it yet… come close, but they are both phrases that could sit comfortably beside your very own ‘The Vacant Site Levy does not kick in until next year.

      Calm down.

      Reply
      1. bad@memes

        Actually, I’ve changed my mind.
        I’m a Grammar Nazi and I find the misspelling of the word ‘QUITE’ very misleading.

        Carry on.

        Reply
    2. v.pip (sometimes off the telly)

      Thanks for that A Person

      What you say makes it all the more meaningless as content in the 2018 Budget Speech and the subsequent spin by this Government. Since it was an item from a different financial year.
      And they have spun it.

      So the question of why it was so heavily spun as a Revenue enhancer within this Budget actually suggests, to me at least, that it is an attempt to show a hard line against wealthy land owners waiting to get wealthier.

      Can we call it a misdirection? Like window-dressing accounts?

      I suppose we really need to see the 2018 year end to know who is right and who is wrong.

      But the Minister cannot regurgitate initiatives from previous Governments & Budgets and sell them as new, (and still expect us not to notice.)

      That might be considered plagiarism by some, and I mentioned Recycled Material above.

      Or maybe we should just all agree that the Campaign for Leo Unit is already earning it’s 5 million.

      Reply
  3. Diddy

    Leaving the hospitality sector with their cushy vat deal makes no sense whatsoever.. they’re back ripping people off and spreading the world globally that Ireland is an expensive destination. Ergo job done by government. They do not need any tax incentives !!!

    As for property, will supply deliver housing that doesn’t stretch the 30-45k pa brigade ( most people) to the limit to buy? I wouldn’t hold my breath

    Reply
  4. Custo

    Wow that’s mad. They got everything wrong and you spotted it. Maybe you should be the minister for finance. And I should manage Liverpool.

    Reply

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