Budget 2022

Oct 12, 2021 | Cathal McCabe

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

20212022
Standard Rate20%20%
Higher Rate40%40%
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

USC Band’sRate
€0- €12,012 –0.5%
€12,013- €21,2952%
€21,296 – €70,0444.5%
€70,045 88%
  • 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

20212021
Personal tax credit€1,650€1,700
Employee tax credit€1,650€1,700
Earned income credit€1,650€1,700

[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.

Telephone:01 491 4132
E-mail:cathal@opeswealthtrust.ie
frank@opeswealthtrust.ie
diarmuid@opeswealthtrust.ie
Website:www.opeswealthtrust.ie
Office:192-194 Harold’s Cross, Dublin D6W AP86

Cathal McCabe