Understanding Budget 2024: Key Takeaways

Budget 2024 introduces tax reliefs for landlords, lower income tax, increased VAT thresholds, R&D credit boost, and eco-friendly incentives.
Budget 2024
Here’s what we cover:

Taxation

Minister for Finance Michael McGrath unveiled the Budget 2024, outlining a spectrum of measures designed to benefit landlords, employees, businesses, and the general populace through tax adjustments and new incentives. Here are the major highlights encapsulated from the budget:

Taxation

Personal Income Tax

  • Tax Credit Adjustments: Tax credits have been augmented to €1,775 for both personal and employee categories, which will reduce the amount of tax payable.
  • Higher Tax Thresholds: The income threshold before higher tax rates apply has been raised, resulting in lower tax liabilities. For instance, self-employed individuals earning €60,000 a year will now have about €842 more due to these adjustments.

Corporate Tax

  • Pillar Two Minimum Effective Tax Rate: In alignment with the EU Minimum Tax Directive, businesses with a global annual turnover of €750 million and above will be required to pay a minimum effective tax rate of 15% on their profits in each country they operate from 31 December 2023.

Property and Housing

  • Benefits for Landlords: A new relief has been introduced, where landlords who continue renting out their property for 4 years can claim tax back, with amounts set at €3,000 in 2024, €4,000 in 2025, and €5,000 in 2026 and 2027.
  • Help to Buy Scheme Extension: Extended till 2025 to support first-time home buyers.
  • Temporary Mortgage Interest Relief: Introduced to provide aid to homeowners.

Vehicle-Related Incentives

  • Electric Vehicle (EV) Incentives: Tax benefits continue for those who purchase electric vehicles as company cars, resulting in lesser tax payable compared to acquiring a regular car.

Value Added Tax (VAT)

  • VAT Registration Thresholds: The registration threshold for VAT has been increased to €40,000 for services and €80,000 for goods, easing the burden on small business owners.
  • VAT Rate Reductions: Starting from 1 January 2024, the VAT rate on Audiobooks and E-books will be reduced to 0%, making them more affordable.

Research and Development (R&D)

  • Tax Credit Enhancement: Businesses can now avail a tax credit of 30% on the amount spent on R&D, up from the previous 25%. This equates to a 30 cents return for every euro spent on R&D activities.

Support for Small Businesses and Investors

  • Angel Investor Relief: A new tax relief has been introduced for angel investors who provide capital for startups, potentially enhancing the attractiveness of investing in small businesses.
  • Retirement Planning Aid for Older Business Owners: Various changes have been made to ease the retirement planning process for older business owners and to allow small businesses to claim more tax credits, supporting their growth.

Climate Change and Farming Supports

  • Energy Efficiency and Solar Panel Installation Reliefs: Extended tax relief on energy-efficient equipment and solar panel installations to support farmers and promote energy efficiency. Young farmers continue to receive support through extended reliefs.

Other Noteworthy Changes

  • Rent Tax Credit Increase: The Rent Tax Credit has been increased to €750 to assist those paying rent or parents paying rent for their student children.
  • Defective Concrete Products Levy Adjustment: Amended to exclude pouring concrete used in the manufacture of precast concrete products from 1 January 2024, with a refund scheme for levy paid between 1 September 2023 and 31 December 2023.

These comprehensive measures from Budget 2024 reflect the government’s enduring commitment to reducing financial burdens, backing businesses, and fostering environmentally friendly practices among other benefits. For further details and the official documentation, visit www.revenue.ie.

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