Is the Budget early this year?

Yes!  The Budget is much earlier this year.  Usually we are picking our way through the last of our Christmas shopping when the Budget news is delivered – last year on the 9th December.

And early December is very late to be deciding on your Budget for the year starting just 20 odd days later – as you can imagine it is mayhem in payroll companies and in Revenue trying to get things set up for the new year just before Christmas.

• The reason the Budget was so late, is so that the government could take into account the income tax paid by the self employed, which was a deadline in November.  This is a large and variable tax take.  But I also suspect it was this close to Christmas, as it’s hard to protest tough decisions when you have a Christmas dinner to plan – is that cynical or realistic ;)
• The reason the Budget is now earlier, is that the government have to fit in with a European budgetary cycle.  Brussels need their numbers earlier, so our budget gets shifted.  For this year, the government will have to make some decisions with some cards uncovered – by next year they will shift the self employed income tax deadline dates forward so that they will have that information too.

Budget Changes

We are not expecting swingeing cuts to tax credits this year.  But the Government need to find a massive €2.5bn in savings – so where will the expected cuts happen?

• For lower and middle income earners  – the ‘good news’ is that your take home pay from your employment will probably stay the same.  We’re not expecting any changes to Income Tax and think it’s unlikely they’ll increase the USC or PRSI on your pay again.
• Car Expenses:  We will probably get hit for either or both of VRT and Motor Tax.  Maybe even extra excise on fuel too.
• If you own a rental property, you will be paying PRSI on that income next year – this was indicated in last years budget for 2014.  Between cuts on the mortgage interest allowable, prtb, lpt, 2nd property tax, household charge, water charges and probably the Broadcast (Licence) fee – landlords have taken a hammering in the last 5 years and will continue to.
• PRSI will also be charged on interest earned.  Will they also increase DIRT as they have in the last few years?  probably not in conjunction with a PRSI increase.