The Minister for Finance, Pascal Donohoe, announced Budget 2022 yesterday as our country faces unprecedented challenges with factors such as post pandemic uncertainty, rising cost of living, the housing crisis and reducing our carbon footprint all at the forefront.
This core budgetary package of €4.6billion looks to a post COVID-19 era and to building recovery and confidence across all sectors of the economy.
Key points from this announcement include:
- Income Tax measures: to combat inflation, the standard rate band of income tax will increase by €1,500 for all earners. There will also be an increase of €50 in each of the Personal Tax Credit, the Employee Tax Credit and the Earned Income Tax Credit
- The extension of Covid-19 Supports: The employment Wage Subsidy Scheme (EWSS) will be extended, in a graduated form, to 30 April 2022
- Indirect Taxation: the reduced VAT rate of 9% for the hospitality sector is being extended to 31st August 2022
- Corporation Tax: Commitment to 12.5% corporation tax for Irish companies with revenues less than €750million
- Help to Buy Scheme: the Help to Buy scheme will be continued in its current form until 31 December 2022
- Climate Action: along with other measures, the accelerated capital allowances scheme for gas vehicles and refueling equipment is being extended by 3 years and now includes hydrogen powered vehicles
- Employment and Investment Incentive Scheme (EIIS) reform – the EIIS will be extended for another 3 years along with positive changes to help the scheme reach its potential. These include opening the scheme up to a wider range of investment funds and relaxing the rules around the ‘capital redemption window’ for investors, subject to certain conditions
These measures are only but a few designed to support vulnerable businesses, build sustainable growth for the future and address cost of living pressures as the economy reopens further. For more information on Budget 2022, see our full budget highlights below or please contact a member of the Baker Tilly Kirk team.