Budget 2022 Summary

By GTC Admin

Budget 2022 was announced on Tuesday 12th October 2021. Below you will find a summary of the changes which are due to take place next year.

Income Tax and USC Rates:

Wage Supports:

  • The Employment Wage Subsidy Scheme (EWSS) has been extended to 30th April 2022.
  • The payment levels will begin to be reduced from December 2021.
  • The scheme will be closed to new applicants from 1st January 2022.

Warehousing of Tax Liabilities:

  • The Tax Debt Warehousing Scheme is expanded.
  • This allows self-assessed income taxpayers with employment income who have a material interest in their employer company to warehouse income tax liabilities relating to their Schedule E income from that employer company.

Remote Working:

  • Remote workers can claim tax relief on 30% of vouched heating and electricity expenses for the days they are working from home.
  • This is an increase from the current limit of 10%.
  • The temporary concession for broadband expenses, whereby 30% of the cost can be claimed back, has been made permanent.

Employment Investment Incentive Scheme:

  • The Employment Investment Incentive (EII) Scheme is extended for three years to December 2024.
  • The scheme is a tax incentive allowing an individual investor to obtain income tax relief of up to 40% on investments for shares in certain companies.
  • The EII scheme is being opened up to a wider range of investment funds.
  • The rule that 30% of an investment in an EII company must be spent before relief can be claimed is removed.
  • The ‘capital window’ rules are being relaxed to allow greater capacity for investors to redeem their capital without penalty.

Help to Buy Incentive:

  • The Help to Buy Incentive is a scheme for first-time buyers.
  • The scheme has been extended to December 2022.
  • The scheme offers first-time buyers a tax rebate of up to €30,000 or 10% of the purchase price of the property.

Zoned Land Tax:

  • A new self-assessed zoned land tax, will be introduced to encourage the use of land for building homes.
  • The tax will apply to land that is zoned as suitable for residential development and is serviced but has not been developed for housing.
  • The tax will be 3% of the market value of the land.
  • There will be a number of exclusions from the tax, which is due to commence in 2024.

Pre-letting Expenses for Landlords:

  • The relief for certain pre-letting expenses of landlords on vacant residential premises will be extended until the end of 2024.

Corporation Tax:

  • A new tax credit for the digital gaming sector is introduced.
  • This means a refundable corporation tax credit for expenditure incurred on the design, production and testing of a digital game.
  • The relief will be available at a rate of 32% on eligible expenditure up to a maximum of €25 million per project.
  • There will also be a per-project minimum spend requirement of €100,000.
  • The relief for certain start-up companies from corporation tax is extended until December 2026.
  • There has been an amendment to the Accelerated Capital Allowance Scheme for energy-efficient equipment.
  • Equipment directly operated by fossil fuels now longer qualifies for the scheme.
  • The Accelerated Capital Allowance Scheme for gas vehicles and refueling equipment has been extended to December 2024.
  • This scheme has been amended to include hydrogen-powered vehicles and refueling equipment.

International Corporation Tax Reform:

  • The Irish Government has signed up to OECD proposals for a global minimum effective corporation tax rate of 15% for multinationals with global revenues in excess of €75 million.
  • Ireland has negotiated an effective minimum rate set at 15%.
  • Ireland has also secured the agreement that the 12.5% rate will continue to apply to companies below the €750 million threshold.
  • The new rules are expected to be implemented as early as 2023.

VAT:

  • The reduced VAT rate of 9% for the hospitality sector will remain in place until 31 August 2022.

Commercial Rates Waiver:

  • The commercial rates waiver will continue until 31st December 2021.
  • The waiver of commercial rates was originally introduced as a COVID-19 emergency support measure in March 2020.
  • The waiver applies to the hospitality, arts and tourism-related sectors.

Carbon Tax:

  • The rate of carbon tax on fuels will increase again this year by €7.50 per tonne/CO2.
  • Carbon tax will rise by the same amount in every Budget until 2029.
  • This will further increase the cost of petrol, diesel, and home-heating fuels.

Income from Micro-generation of Electricity:

  • A tax disregard of €200 is being introduced for personal income received by households that sell any residual electricity they generate back to the grid.

Vehicle Registration Tax and Electric Vehicles:

  • Budget 2022 Vehicle Registration Tax rates to further encourage the transition to lower-emission fuels.
  • A revised VRT table will be introduced from January.
  • The 20-band table will remain.
  • There will be a:
    • 1% increase for vehicles that fall between bands 9-12.
    • 2% increase for bands 13-15.
    • 4% increase for bands 16-20.
  • The €5,00 relief from VRT battery electric vehicles (BEVs) is extended to the end of 2023.
  • The BIK exemption where an employer makes a BEV (both new and used) available to employees has been extended until 2025.

Agri Tax Measures:

  • The Young Trained Farmer Stamp Duty Relief is extended to December 2022.
  • This measure provides relief from stamp duty on the conveyance of farmland to eligible young-trained farmers.
  • Stock relief is extended for a further 3 years to December 2024.
  • Enhanced Stock Relief for young, trained farmers and for registered farm partnerships is also extended for 1 year to December 2022.
  • The Farmers Flat Rate Addition is decreased from 5.6% to 5.5%.
  • The flat-rate scheme compensates unregistered farmers for VAT incurred on their farming inputs.

Bank Levy:

  • The bank levy, is being extended for one further year to December 2022.