Navigating Ireland’s 2024 Budget: Key Highlights for Taxpayers and Businesses
As the fiscal year unfolds, businesses and individuals in Ireland are eager to understand the implications of the newly announced 2024 budget. This year’s budget, presented by the government, brings about a range of changes that affect taxes, credits, and relief schemes. In this blog, we will delve into the major highlights of the budget, keeping you informed about what’s new in the financial landscape of Ireland.
Main Highlights
1. Standard Rate Band Increased
One of the most significant changes in the 2024 budget is the expansion of the standard rate band. This means that more of your income may fall within the standard rate, reducing your tax liability. It’s a welcome change for many taxpayers.
2. USC Band Ceiling Increased by 2%
The increase in the Universal Social Charge (USC) band ceiling by 2% is good news for those earning above the previous limit. This adjustment will help reduce USC for individuals with higher incomes.
3. USC Rate Reduced to 4%
The reduction of the USC rate from 4.5% to 4% means a little extra money in the pockets of many taxpayers. This decrease can provide some relief from the burden of social charges.
4. Income Tax Rates Unchanged
While there are several changes in the budget, the income tax rates remain stable. This means that the tax rates you are accustomed to will continue into 2024.
5. Personal Tax and Employee/Earned Income Credits Increased
Individuals will benefit from an increase of €100 in the personal tax and employee/earned income credits, lightening their tax load.
6. Rent Tax Credit Raised to €750
A boost in the rent tax credit to €750 is excellent news for those who pay rent. This adjustment can ease the financial strain on renters.
7. New Tax Relief for Landlords
Landlords will be pleased with the introduction of new tax relief of up to €3,000 in 2024. This can be a significant incentive for property owners.
8. Limited Mortgage Interest Relief
The budget introduces limited mortgage interest relief, which can be a helping hand for homeowners.
9. Help to Buy Property Scheme Extended
The popular Help to Buy Property Scheme is extended until 31 December 2025, offering continued support to first-time buyers.
10. PRSI Rate Increase
From 1 October 2024, there will be a 0.1% increase in all PRSI rates. This change impacts both employers and employees.
11. Capital Gains Tax Relief for Angel Investors
Angel investors will enjoy a new capital gains tax relief, encouraging investment in startups and innovative businesses.
12. Deferral of Changes to BIK on Electric Vehicles
The budget defers changes to the benefit-in-kind (BIK) on electric vehicles, ensuring continued incentives for eco-friendly commuting.
13. Research & Development Tax Credit Increased
The research and development tax credit sees a boost from 25% to 30%, along with other improvements. This encourages innovation and technological advancement in Ireland.
14. Accelerated Energy Efficient Equipment Capital Allowances Extended
Businesses investing in energy-efficient equipment will benefit from the extension of the Accelerated Energy Efficient Equipment Capital Allowances.
15. Changes in Retirement Relief from 2025
Starting from 1 January 2025, there will be changes in retirement relief, potentially affecting those planning for their golden years.
16. Improvements to Employment Investment Incentive Relief
The Employment Investment Incentive relief receives enhancements, making it more attractive for investors.
17. Increase in VAT Registration Thresholds
Small businesses will appreciate the increase in VAT registration thresholds, reducing the administrative burden for emerging enterprises.
18. Excise Duty on Tobacco Products
A 75c increase in excise duty on a packet of 20 cigarettes, with a proportional increase on other tobacco products, aims to discourage smoking and improve public health.
19. Charities VAT Compensation Scheme
The Charities VAT Compensation Scheme sees an increase, providing further support for charitable organizations.
20. Vacant Homes Tax Rate Increase
The budget raises the vacant homes tax rate, encouraging the efficient use of housing resources.
21. Revised Bank Levy for 2024
A revised bank levy will be introduced in 2024, potentially impacting the financial sector.
Ireland’s 2024 budget brings several noteworthy changes that can affect your finances, whether you’re an individual taxpayer, a business owner, or an investor. Staying informed about these changes and understanding their implications is crucial. If you need expert guidance on navigating these adjustments and optimizing your financial strategies, consider consulting with our experienced team of accountants. We’re here to help you make the most of the opportunities presented by this year’s budget while ensuring compliance with the latest regulations. Contact us today to learn more about how we can assist you in achieving your financial goals in 2024 and beyond.
