Dublin 10th October 2023: The Irish SME Association, ISME, sets out its response to the 2024 Budget announced this afternoon.
- The tax package announced is minimal but welcome. The adjustment to the standard rate cut off to €42,000 means the average worker will be €400 per annum better off. Overall saving on income tax €440 per person per annum
- Adjustments to the tax credits: this means an increase in net income of €100 per annum
- USC rate cut – 4.5% reduced to 4% – starting threshold for 4% increase to €25,765 – Person on €42,000 (standard rate cut-off) USC reduction €81 per annum
- However, workers will still be paying tax at the marginal rate while earning €5,200 below the average industrial wage.
- The increase of 12.4% (13.9% including auto-enrolment) in the national minimum wage increase will cost €3,228 per employee at or near the minimum wage.
- Government has announced an aid package of €250m for 130,000 businesses based on their rates payments. This support averages €1,923 per business, €1,305 below the pay increase. It remains to be seen if this will be sufficient to keep them going.
- Angel investors can avail of CGT relief amounting to twice their investment.
- KEEP scheme market valuation will increase from €3m to €6m.
- The VAT threshold will increase from €37,000 to €40,000 for services and from €70,000 to €80,000 for goods.
- The EIIS threshold will be increased to €500,000
- There will be a €400 credit for electricity microgeneration by households.
- There will be a consultation completed by next summer on share-based remuneration for employees.
- Landlords will receive a rental income disregard, at the standard rate, of €3,000 in 2024, €4,000 in 2025, and €5,000 in 2026 and 2027, subject to terms.
- Section 481 relief for the film industry will increase from €70m to €125m.
- The motor insurance levy will be reduced by 1%
- The vacant home levy will increase to three times the relevant LPT
In short, this is a large budgetary package spread very thinly through the economy. There are no bold steps taken on the entrepreneurial side, which seems like an opportunity missed
Issued on behalf of ISME by Heneghan
Neil McDonnell is available for comment.