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The Government has announced an “unprecedented” budget package of € 17.75 billion to deal with the uncertainty surrounding Brexit and the Covid-19 pandemic.
But what does Budget 2021 mean to the average worker / consumer?
Free-lancers
The self-employed will benefit from the increase in tax credits.
The earned income tax credit for the self-employed will be increased by € 150, which means they can receive an additional € 750 in income before paying taxes.
This change will also apply retrospectively to 2020.
minimum salary
The weekly threshold for the highest PRSI rate for employers will increase from € 394 to € 398. This will mean that employers will have no incentive to reduce the hours of a full-time minimum wage worker.
Meanwhile, families with caring duties for their loved ones will benefit from an increase in the tax credit for dependents from € 70 to € 245.
Remote work
People who work from home will be able to claim tax deductions on utilities such as electricity, heat and possibly broadband.
USC
The ceiling of the second band of the USC will increase from € 20,484 to € 20,687, which will provide a small tax increase for people in that salary category.
Rising Gasoline and Diesel Prices
The Government has announced an increase in the carbon tax of € 7.50 per ton of CO2. This will bring the carbon tax from € 26 to € 33.50 per ton of CO2.
The indirect result will be an increase of about 2.5 cents per liter for gasoline and diesel, which will take effect from midnight tonight.
The carbon tax changes will add € 1.51 to a 60-liter diesel fill and € 1.30 to a 60-liter gasoline fill.
Motor tax
Regarding the car tax on new cars, Finance Minister Paschal Donohoe said that the number of bands of the Vehicle Registration Tax (VRT) will increase from 11 currently to 20, and will apply to all new car sales as of January 1. According to the Society of the Irish Motor Industry (SIMI), the changes will mean an increase of € 1,000 in the price of the average new car.
While current VRT rates range from 14% to 36%, the new VRT table has a range of 7% for cars with carbon (CO2) emissions up to 50g / km up to 37% in vehicles with emissions greater than 191 g / km. .
The Minister of Finance has also adjusted the NOx surcharge bands, a tax that applies to all new cars and used imports.
Home buyers
The Buying Assistance scheme for first-time buyers has been extended until the end of 2021.
The scheme allows first-time buyers to claim a tax relief worth 10 percent of the value of a home, up to a maximum of 30,000 euros.
5.2 billion euros will be spent on housing in 2021, an increase of 773 million euros.
An affordability package for affordable housing and cost rental schemes worth € 110 million will be introduced next year.
Meanwhile, a reduced stamp duty rate of 1 percent on transfers of agricultural land between family members will be extended for another three years.
Cigarettes and alcohol
Cigarettes will go up 50 cents, bringing the average cost of a pack to 14 euros, while the price of alcohol will remain unchanged.
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