Local Expert’s Budget 2016 Summary

Budget 2016

Budget 2016 introduces numerous changes that are outlined in the official Budget 2016 summary.
Derek Christian of Swords based Tax and Accountancy Company, Tax Assist said “the Government has confirmed that they will address the discrepancy in the tax system between self-employed and PAYE workers by introducing an additional credit. This new tax credit is worth E550 for self-employed people and farmers. It will be increased during the upcoming years to match the PAYE credit of E1,650.
Furthermore, the USB band has been reduced as part of Budget 2016. The former 7 per cent band has been cut to 5.5 per cent on incomes earned between E18,669 and E70,004. This reduction means that overall the higher rate of tax has come down to 49.5 per cent for workers earning up to E70,044.
Capital taxed have changed as expected. The tax free threshold rate for gifts and inheritance has been increased to E280,000 hoping to assist children inheriting the family home and remove the need to sell the property.
The minimum wage of employers has been increased by 50 cents to E9,15. This is going to be effective by the first of January 2016. Low-income earners will see an noticeable improvement in their incomes as the Minister introduced a PRSI relief with a maximum level of E12 per week.
One of the most significant changes have been made in childcare as the Government will now contribute towards play school and day-care service costs. This is being implemented for children from the age of three until they begin primary school. Furthermore, fathers will now be entitled to two weeks paternity leave under the new measures which are effective in September 2016. Children’s allowance has increased by another E5 a month to a total of E140.