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Budget Highlights 2022

Income Tax

  • An increase of €1,500 in the income standard rate band from €35,300 to €36,800 for single individuals and from €44,300 to €45,800 for married couples/ civil partners with one earner.
  • An increase in the personal tax credit from €1,650 to €1,700
  • An increase in the Employee Tax Credit from €1,650 to €1,700
  • An increase in the Earned Income Credit from €1,650 to €1,700
  • €608 increase to the 2% rate band ceiling to €21,295
  • The reduced rate of USC for medical card holders and those over 70 earning less than €60,000 is being extended for a further year.
  • The current tax arrangement for working from home are to be enhanced and formalised in this year’s Finance Bill so that an income tax deduction amounting to 30% of the cost of vouched expenses for heat, electricity and broadband in respect of those days spent working from home can be claimed by taxpayers.
  • The BIK exemption for battery electric vehicles will be extended out to 2025 with a tapering effect on the vehicle value. This measure will take effect from 2023. For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023; €20,000 for 2024; and €10,000 for 2025.
  • Extension to 2024 of tax deduction for pre-letting expenses of up to €5,000 for landlords where property has been vacant for a year before first letting.
  • The Enhanced Help to Buy Scheme provides that where applicants satisfy certain conditions, increased relief is available up to a maximum of €30,000. This relief is being extended to the end of 2022.

EWSS

The Employment Wage Subsidy Scheme will be extended until 30 April 2022 in a graduated form, but the scheme will close to new employers from 1 January 2022
The following are the broad parameters of this extension:

  • No change to EWSS for the months of October and November
  • Businesses availing of the EWSS on the 31st of December 2021 will continue to be supported until the 30th of April 2022
  • For December, January and February, the original two-rate structure of €151.50 and €203 will apply
  • For March and April 2022, a flat rate subsidy of €100 will be put in place. In addition, the reduced rate of Employers’ PRSI will no longer apply for these two months

Expansion of Warehousing of Tax Liabilities

The tax debt warehousing scheme will be expanded to allow 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.

Additional Tax Measures

  • The reduced rate of VAT of 9% for the hospitality sector will remain in place until the end of August 2022.
  • From 1 January 2022 the weekly income threshold for the higher rate of employers PRSI will increase from €398 to €410
  • The relief for start-up companies is to be extended and will amended so that companies can avail of the relief within their first five years of trading rather than three as is currently the case.
  • A zoned land tax of 3% of the market value of the land is to be introduced, there will be a two year lead in period for land zoned before January 2022 and a three year lead in period for lands zoned after January 2022.
  • A new tax credit for the digital gaming sector is to be introduced.

Farming Measures

  • There is a decrease in the farmers flat rate addition from 5.6% to 5.5%
  • Stock relief is being extended for a further 3 years. The enhanced stock reliefs for young trained farmers and farm partnership are being extended for a year.
  • Young trained farmer stamp duty relief is extended until the end of 2022.