Oct 12, 2021 | Cathal McCabe
This year’s Budget was prepared against what the Minister of Finance called an “improving economic backdrop”.
The economy is predicted to grow by 6.5% in 2022 [Modified GDP] 5% in 2023 while the current post pandemic unemployment rate of below 10% is predicted to fall significantly over to 6.5% over the coming 12 months.
A summary of the main measures which may impact on individuals directly is outlined below:
- The standard rate band has been increased by €1,500 for all earners.
- The Personal/Employee and Earned income credit have been increased by €50.
- Small change to USC tiers to ensure lower paid works do not pay higher rate USC.
- No headline changes to CGT/CAT rates or thresholds.
- Extension of the Help to Buy scheme into 2022.
- Remote Working- income tax deduction amounting to 30% of vouched expenses for light/heat and broadband.
Income Tax Rates & Band’s
|Single person standard rate band||€35,300||€36,800|
|Married couple, one income standard rate band||€44,300||€45,800|
|Married couple, two incomes standard rate band||€70,600, transferable between spouses to a maximum of €44,300||€72,100, transferable between spouses to a maximum of €45,800|
USC Rates & Bands
|€0- €12,012 –||0.5%|
|€21,296 – €70,044||4.5%|
- The self-employed 3% USC surcharge on non-PAYE incomes over €100,000 continues to apply for 2022.
- The reduced 2% USC rate for medical card holders with income under €60,000 continues to apply for 2022.
Income Tax Credits
|Personal tax credit||€1,650||€1,700|
|Employee tax credit||€1,650||€1,700|
|Earned income credit||€1,650||€1,700|
- Extension of Help to Buy scheme for First Time Buyers until the end of 2022. This scheme will be subject to a review next year.
- A zoned land tax will be phased in over the coming years. The tax will apply at a rate of 3% equal to the value of the land.
 Social Welfare Measures
- State Pension will increase by €5 a week while the fuel allowance will increase by the same amount. The living alone allowance will increase by €3 a week.
- The Christmas bonus will be paid in early December 2021 at 100% of the weekly amount.
- No changes announced to child benefit.
- Increase in Carbon Tax of €7.50 per tonne resulting in an increase in petrol and diesel.
- VRT changes to reflect new emissions system and will result in higher VRT rates for higher emission vehicles.
- Employment Investment Incentive scheme [EIIS] scheme to be extended for a further 3 years which changes made to improve the functionality and attractiveness of the scheme.
- Extension of corporation tax relief for certain start up’s up to 2026.
- Employment Wage Subsidy Scheme to be extended for four months until the end of April 2022, however changes will be made to the scheme.
- No changes announced to pensions tax relief or thresholds.
- No changes to DIRT rates.
Please note that this is a general summary and no action should be taken without taking detailed advice.
|Telephone:||01 491 4132|
|Office:||192-194 Harold’s Cross, Dublin D6W AP86|