Executive summary

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:

[1] Personal Tax

• • 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

USC Rates & Bands

• 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

[2] Housing

• 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.

[3] 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.

[4] Climate Change Measures

• 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.

[5] Business & Entrepreneur’s

• 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.

[6] Pension’s/Investments

• No changes announced to pensions tax relief or thresholds.
• No changes to DIRT rates.

Advice

Please note that this is a general summary and no action should be taken without taking detailed advice.