The key points of Budget 2022 - what's in it for you?

12th October 2021


The Key Points from Budget 2022


Income Tax


  • The standard rate income tax band will be increased by €1,500 to €36,800 for single persons and to €45,800 for married couples etc; no other changes to income tax rates or bands.

  • The Personal, Employee (PAYE) and Earned Income (Self-Employed) Tax Credits will be increased by €50 to €1,700.

  • The second band of the Universal Social Charge will be increased by €608 from €20,687 to €21,295.

  • Exemption from the top rate of the Universal Social Charge for all medical card holders & those over 70 earning less than €60.k is being retained.

  • The weekly threshold for the higher rate of employees’ Prsi will increase from €398 to €410 per week.

  • The Help to buy (HTB) scheme will be extended until December 2022.

  • Relief for pre-letting expenses of landlords extended for a further three years.

  • Income tax deduction amounting to 30% of vouched expenses for heat, electricity and broadband incurred whilst working from home.

  • The tax debt warehousing scheme will be expanded to allow self-assessed income taxpayers with employment income who have a material interest in their employer company to warehouse income tax liabilities relating to their income from that company.


Corporation Tax


  • The main Corporation Tax rate will be unchanged at 12.5% for companies with revenues less than €750m.

  • New tax credit for Digital Gaming sector – Digital games development companies can receive a refundable corporation tax credit for expenditure on the design, production and testing of a game. Relief will be available at a rate of 32% on eligible expenditure up to a limit of €25m per project.

  • The Employment Investment Incentive Scheme (EIIS) will be extended for three years– opened up to wider range of investment funds & the 30% expenditure relief will be removed.

  • Section 486C corporation tax relief for certain start-up companies extended to the end of 2026 and relief will be available for up to 5 years.

  • The Bank Levy will be extended for another year.

  • The Accelerated Capital Allowance scheme for energy efficient equipment (gas vehicles & refuelling equipment) will be extended for three years (to end 2023).


Business Supports


  • There will be no cliff edge to the Employment Wage Subsidy Scheme (EWSS) – it will remain in place in a graduated form until the 30th April 2022. There will be no change for the months October to December, a two-rate structure of €151.50 and €203 per week will apply for the months January & February while for the months March & April, there will be a flat rate subsidy of €100 per week. The scheme will be closed to new employers from 1st January.


Vat


  • The 9% Vat rate applicable to the hospitality & tourism sector will remain until the end of August 2022, no other changes to Vat rates.


Capital Taxes


  • A Zoned Land tax of 3% (based on the market price of land) is to be introduced. It will apply to serviced land which is zoned for residential development. It will replace the vacant site levy.


Excise Duties


  • The price of 20 cigarettes will increase by 50 cents, with pro rata increases on other tobacco products, from midnight tonight.

  • Carbon tax will be increased by €7.50 per tonne/CO2 on auto fuels from midnight tonight and all other fuels from 1st May 2022.

  • A revised Vehicle Registration Tax (VRT) table will be introduced from January 2022. The 20 band VRT table will remain but with a uplift in rates as follows:

  • 1% increase for vehicles that fall between bands 9-12

  • 2% increase for bands 13-15

  • 4% increase for bands 16-20

  • The €5,000 VRT relief for battery electric vehicles extended to end of 2023.


Farming


  • The flat rate addition for farmers to reduce from 5.6% to 5.5% from 1st January 2022.

  • General stock relief for farmers to be extended to end 2024.

  • Enhanced stock relief and stamp duty relief for young trained farmers to be extended to end 2022.


Welfare


  • There will be a €5 increase in the state pension in 2022.

  • A Christmas Bonus of 100% will be paid to all social welfare recipients.

  • The fuel allowance will increase by €5 per week.

  • The living alone allowance will increase by €3 per week.

  • The qualified child payment will increase by €3 for Over 12’s and by €2 for Under 12’s.

  • Free GP Care will be extended to 6- and 7-year-olds.

  • The DPS threshold will be lowered from €114 to €100.

  • The income disregard for Carer’s allowance will be increased to €350 for a single person and to €750 for a couple. The capital disregard for Carer’s allowance will be increased to €50,000.

  • The earnings limit on disability allowance will increase to €375. The general weekly means disregard for disability allowance will increase to €7.60 per week.

  • Parent’s benefit to be paid for 7 weeks (an increase of two weeks) from July 2022.

  • A youth travel card for 19- to 23-year-old to be introduced.


Other


  • National Minimum Wage to be increased by 30 cents to €10.50 per hour, from 1st January.

  • Maintenance grant for third level will be increased by €200 with the income eligibility threshold increased by €1,000 & qualifying distance reduced to 30km.

  • The €200 contribution fee for post-Leaving Certificate courses will be abolished.


We hope you find this information useful and please feel free to share it. If you have any questions, feel free to contact us.


Timothy Kelliher & Company Limited

Chartered Accountants


Phone: +353 (0) 64 6632105

Email: info@timothykelliher.ie

Web: www.timothykelliher.ie

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