13 Oct What Budget 2024 Means for the Self-Employed

Budget 2024 (announced on Tuesday, 10th October 2023) contains a range of benefits for the self-employed, including tax credits, changes to tax bands, with incentives for landlords, renters and home-owners and a new entrepreneur relief for angel investors.

Many of the changes come into effect from January 2024, those that come into effect in 2023 or later in 2024 are indicated below:

KEY BENEFITS & CHANGES

Taxation & Income

• Income tax rates will remain at 20% and 40%
• The standard 20% tax band increases by €2,000 to €42,000 for single persons, with proportional increases for others.
• Several tax credits will rise by €100.
• The ceiling for the 2% Universal Social Charge (USC) band will increase by €2,840 from €22,920 to €25,760. The higher 4.5% USC rate will be reduced to 4%.

This mean a single person earning €46,000 in 2024 should see an increase of €2,000 in their net income as a result of cumulative income tax changes and USC changes compared to previous years.

Business & Development

• The minimum wage increases by €1.40 to €12.70 per hour.
• All PRSI rates rise by 0.1% on 1 October 2024
• Parental leave is extended by 2 weeks to 9 weeks from August 2024.
• Research and Development (R&D) tax credits increase from 25% to 30% on qualifying R&D expenditure.
• A new reduced rate of Entrepreneur Relief (Capital Gains Tax) is being provided for angel investors in innovative start-up SMEs, subject to conditions, which our team can easily guide you through.

Housing & Homes

• Rent tax credit increases from €500 to €750 per year.
• A one-year Mortgage Interest Tax relief, capped at €1,250 per property, will be introduced for homeowners with an outstanding mortgage balance on their primary dwelling of between €80,000 and €500,000 as of 31 December 2022
• A temporary rental income tax relief is being introduced to support private landlords, subject to certain conditions. The relief will reduce the tax due on rental income by up to €600 in 2024, €800 in 2025, and €1,000 in 2026 and 2027. The relief will be clawed back if the landlord leaves the rental market during this time.
• The Help to Buy Scheme is extended to the end of 2025, with amendments to include applicants of the Local Authority Purchase Scheme.
• All domestic electricity customers will get €450 off their electricity bills. The energy credit will be paid in 3 installments of €150. The first payment will be made in December 2023, the second will be made in January 2024 and the third will be made in March 2024.
• Extension of the 9% VAT rate for gas and electricity for an additional 12 months.

VAT

• Increase in VAT registration thresholds to €40k and €80k in relation to the respective supplies of services and goods from.

Transport

• Continued reduced fares and VRT Relief is extended for battery electric vehicles.
• The carbon tax for auto fuels will increase from €48.50 per tonne to €56 per tonne from October 11th. The measure will add 2.5c and 2.1c to diesel and petrol respectively. Carbon tax for all other fuels will increase from 1 May 2024.
• The temporary excise rate reductions on auto diesel, petrol and marked gas oil will be extended until 31 March 2024.

Education & Training

• The hot school meals programme will be extended to a further 900 schools.
• The student contribution, for third level education and training, will be reduced by €1,000 in the 2023/2024 academic year, for students who qualify for the Free Fees Scheme. From September 2024, the Student Contribution fee will be abolished for all incomes under €55,924. Maintenance grant rates are to rise.
• There will be a 33% reduction in the contribution fee for apprentices in higher education (2023/2024 academic year) along with an increase in craft apprenticeship scheme places.

Social Welfare

• All weekly social welfare payments are to rise by €12.
• Qualified child rates see an increase of €4 for children under 12 and €4 for children aged 12 and above.
• A double payment of child benefit will be paid in December 2023
• Child benefit will be see an extension to age 18 for children in full-time education

Helpful Resources

The full details of Budget 2024 are available from the government’s revenue website.

Revenue.ie are also providing free webinars during October 2023, for employers and tax agents on the new “Enhanced Reporting Requirements” coming into effect in January 2024. These sessions are intended to provide employers with an understanding of their responsibilities and obligations regarding this additional reporting requirement. Book your place via Eventbrite.

Let Our Tax Experts Help You

Our expert team of accountants can help you to maximise all the benefits that apply to you and your business. Reach out by phone or email for assistance or join our quarterly newsletter to get the latest tax news and tips for growing your business.