Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

There are three reasons. First, much of the work carried in 2014 may not be fully paid for until we cross into the following year, because people make different arrangements with small contractors. The Revenue will only pay the credit on bills that are paid, and not on bills that are incurred. Second, there is the burden on the State.

Obviously, it is easier to bring forward a scheme such as this in an economy that is beginning to grow, particularly if there will be no up-front cost in 2014 and the cost will be spread to 2015 and 2016. One hopes the scheme will be self-financing. The 13.5% VAT rate applies to building and one hopes the scheme will generate the required income. From a taxpayer's point of view, this is very important. Many people will build extensions and undertake home improvement works, but their tax liability will not be €4,050 in one tax year. By splitting the liability over two years they will get the full benefit in 2015 and 2016.