What Budget 2022 Means To You

Budget 2022
It has been a busy few days for the Irish Government with not only the announcement of the annual budget yesterday but also the announcement last week that Ireland would be signing up to the OECD G20 Inclusive Framework agreement, with an increase in the well-known and discussed 12.5% corporation tax rate to 15% for certain companies.
The 2022 budget is being promoted as business-friendly by the Government when announcing around €1 billion in new spending measures and over €500 million in tax cuts.
There are plans to attract more foreign direct investment into Ireland with money going to IDA, Intertrade Ireland and many other state agencies to promote innovation and help businesses focus on digital technology.
So there was a little of something for everyone but it was by no means a giveaway budget and with inflation expected to hit 3.7% for September, according to the Minister, the highest level since June 2008, rising prices, as well as increases to the carbon tax, could eat into many of the measures announced.Below is a summary of the main tax changes that will impact businesses & their employees.

 For Business
  • 12.5% Corporation Tax rate to remain for Businesses with a turnover of less than €750m and this will increase to 15% for those with turnover above this.
  • The Emergency Wage Subsidy Scheme (EWSS) will be extended until the end of April next year, with a flat rate subsidy of €100 for March and April
  • The reduced VAT rate of 9pc for the hospitality sector will remain until the end of August next year
  • 50 per cent excise relief for small producers of Cider
  • Employment Investment Incentive scheme extended and reformed
  • €30million for State’s innovation equity fund, matched by European Investment Bank funding
  • Tax relief at 32 per cent for investment in digital gaming, up to €25million per project
  • Bank levy to be extended, but reduced to €87million
  • €60million for the extension of commercial rates waive on a targeted basis, from 2021 funding
For Aviation and Transport
  • €90 million aviation package, from 2021 funding
  • €60 million for capital and operational aviation grants
  • €1.4 billion for public transport networks
  • €25 million for a youth travel card
  • €360 million for active travel
For Tourism, Arts & Sport   
  • €50million for further business supports
  • €39million for enhanced tourism marketing
  • €25million for live entertainment supports
  • €55million for new media commission
 For Employees  
  • The threshold for the second USC band (2%) will increase slightly from €20,484 to €21,295.
  • The PAYE/employee tax credit and the personal tax credit will both increase by €50 to €1,700 i.e. €3,400 in total. This means most employees now won’t start paying income tax until they earn more than €17,000 – high by international standards.
  • The point at which people start paying the higher 40% rate of income tax will increase by €1,500 to €36,800 for a single person, however, this is still low by international standards. The cut-off point for married, one-earner couples will rise to €45,800.
  • The above measures will see a single person who earns over €36,800 benefit to the tune of around €415 a year while a married, one-income couple earning over €45,800 will benefit by around €465.
  • The earned income tax credit for the self-employed will also increase by €50 to €1,700 on the back of a €150 increase last year.
  • Income tax and employee PRSI rates will remain the same.
  • The minimum wage will increase by 30 cent to €10.50 an hour.
  • Those working from home will now be able to claim tax relief on up to 30% of their heating and electricity costs (up from 10% at present). The 30% relief on broadband costs, introduced in last year’s Budget, remains the same.
  For Motorists
  • Carbon tax will mean an extra €7.50 per ton of carbon dioxide emission
  • Petrol – per 60L fill, it will be an extra €1.28
  • Diesel – per 60L fill, it will be an extra €1.48
  • The Vehicle Registration Tax (VRT) will see a 1% increase for vehicles that fall between bands 9-12, a 2% increase for bands 13 to 15 and a 4% increase for bands 16 to 20.
  • €5,000 relief for electric vehicle batteries has been extended until the end of 2023
For Parents
  • €716 million packages including €69 million to freeze fees at services that take funding for improved staff terms
  • National Childcare Scheme universal subsidy extended to under-15s
  • Removal of pre-school and school hours from subsidised hours, to benefit 5,000 children from low-income families
  • Parents benefit extended by 2 weeks from next July
  • Back to School allowance up €10
  • Qualified children rate up by €2 for under 12s, €3 over 12s
For Housing
  • €6billion total funding, with €2.5billion for social housing next year
  • €174million for affordability measures
  • Zoned land to be introduced at a lower rate than vacant land tax – three per cent not seven per cent
  • Lead-in times for 2-3 years depending on when land zoned
  • Help to Buy extended by one year, and to be fully reviewed
  • €168 million in current expenditure, or 7 per cent increase, for 14,000 HAP tenancies