On Tuesday 12 October 2021, Minister for Finance, Mr. Paschal Donohoe T.D., delivered his Budget 2022 speech to the Dáil.
In his speech the Minister acknowledged the cost of living pressures that are currently confronting citizens and businesses and said that Budget 2022 has been designed to meet “the twin goals of investing in our future, of meeting the needs of today, while putting the public finances on a sustainable path”.
Some of the key changes announced in Budget 2022 include;
- Standard rate bands to be increased by €1,500.
- Personal tax, employee tax and earned income credits increased from €1,650 to €1,700.
- 2% USC rate band to be increased from €20,687 to €21,295.
- Weekly threshold for higher rate of employer’s PRSI to be increased from €398 to €410.
- Remote Working Tax Relief amounting to 30% of the cost of vouched expenses for heat, electricity and broadband to be available for such costs incurred while working from home.
- Extension of the Employment Investment Incentive (EII) scheme for a further three years along with certain enhancements to the scheme to make it more attractive to investors.
- Minimum wage up 30 cent to €10.50.
- Reaffirmation of Ireland’s commitment to the 12.5% corporation tax rate for businesses with a consolidated group turnover below €750m (15% where turnover is above €750m).
- Corporation tax relief for certain start-up companies to be extended for a period of five years until 31 December 2026. Companies may avail of the relief within their first five years of trading, an increase from the current three-year window.
- Employment Wage Subsidy Scheme (EWSS) to continue until 30 April 2022 with the level of support being scaled back from December 2021 onwards.
- Expansion of the tax debt warehousing scheme to allow individuals who have a “material interest” in their employer company to participate in the scheme.
- A new digital gaming sector tax credit.
- 9% VAT rate applying to certain activities in the hospitality and tourism sector to continue to 31 August 2022.
- A new Zoned Land Tax to replace the existing Vacant Site Levy to be introduced on certain land which is zoned suitable for residential development or for a mix of uses including residential development. The tax rate will be 3% of the market value of the land.
- Help to Buy scheme to be extended to 31 December 2022.
- The deduction available for landlords for qualifying pre-letting expenses from rental income (subject to certain conditions and capped at €5,000 per premises) to be extended for a further three years to the end of 2024.
- General stock relief for farmers to be extended to the end of 2024.
- Enhanced stock relief and stamp duty relief for young trained farmers to be extended to the end of 2022.
- The flat-rate addition for farmers (which compensates non-VAT registered farmers for irrecoverable VAT on their input costs) to decrease from 5.6% to 5.5% from January 2022.
We have summarised the key points from Budget 2022 which we feel are relevant to our private and corporate clients and contacts. We hope you find our WENTWORTH Budget 2022 Summary useful and informative.
We would be delighted to discuss any queries you may have in relation to the impact Budget 2022 will have on you and your finances, just give us a call to arrange a meeting with a member of our tax team.
Please click on the link below for our expert analysis.