Introduction
The Irish budget for 2024 can bring significant changes and implications for businesses of all sizes. From its impact on small businesses to the effects on start-ups, and the tax changes it entails, this budget can have serious implications on the business landscape in Ireland. In this article, we will explore what to expect from the Irish budget 2024, focusing on its implications for SMEs and the new business incentives.
What can we expect from the Irish Budget 2024
In the realm of fiscal policy, Ireland is poised for several changes soon. Expectations include income tax cuts, support for the cost of living, incentives for landlords, improvements to R&D tax credits, a higher carbon tax, and potential employer PRSI increases.
- Income tax cuts likely through raising standard rate band and tax credits.
- Support for cost of living including energy credits expected.
- Measures to attract and retain landlords to boost rental supply possible.
- Changes to make R&D tax credit more attractive for businesses being considered.
- Carbon tax set to increase by €7.50 per tonne of CO2.
- Employer PRSI increases seem inevitable in coming years to raise more social insurance revenue.
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Income Tax Changes
In Ireland’s upcoming fiscal plans, changes to income tax are on the horizon. The standard rate income tax band is set to widen, offering relief to middle-income earners. Additionally, tax credits could see an increase, while adjustments to USC bands are more likely than rate cuts, automatic indexation of bands and credits to inflation remains a topic of discussion.
- Widening of standard rate income tax band to keep more middle-income earners out of top rate likely.
- Increase to tax credits also probable, costing €242m for €50 rise per credit.
- Adjustment to USC bands more likely than rate cuts.
- Automatic indexation of bands and credits to inflation still on agenda.
Cost of Living Measures
In the upcoming fiscal plans, we anticipate the return of energy credits for households and potential changes to rent tax credits, possibly removing age limits, along with the potential revival of targeted mortgage interest relief to assist those facing rate hikes.
- Repeat of energy credits for households anticipated.
- Changes to rent tax credit to boost uptake possible, including removing age limit.
- Targeted mortgage interest relief for those facing rate hikes may return.
Housing & Property
Anticipate tax incentives for landlords, possible return of Section 23-style relief, and likely extension of the Help to Buy scheme beyond 2024.
- Tax incentives for landlords to remain in rental market expected.
- Reintroduction of Section 23 style relief to promote investment in certain areas possible.
- Extending Help to Buy scheme past 2024 likely.
Enterprise & Innovation
Proposed changes in the Irish budget hold promising potential: a higher R&D tax credit, simplified rules, and a new 20% CGT rate aim to boost investment, while EIIS adjustments strive for greater accessibility.
- R&D tax credit increase to 30% or 35% would enhance attractiveness.
- Simplifying R&D rules and application process would also help.
- New 20% CGT rate on SME share sales would incentivise investment.
- EIIS scheme changes to make it more accessible recommended.
Carbon Tax
CO2 tax increase and electric vehicle incentives anticipated.
- Increase of €7.50 per tonne of CO2 in line with existing schedule.
- Measures to accelerate electric vehicle uptake probable.
Employer PRSI
Anticipated tax hikes and potential self-employed rate increase ahead.
- Increases seem inevitable in coming years to raise more revenue.
- Higher rate for self-employed also possible.
Summary of the Irish Budget 2024 Expectations.
The key objectives appear to be easing cost of living pressures, boosting housing supply, promoting innovation and competitiveness, and continuing climate action. Tax changes will likely be targeted, with income tax cuts focused on bands and credits rather than rates.
