It may be coming earlier this year, but the expectations are that the Budget won’t be as tough as those that have gone before it. While we won’t know for sure the full impact of this year’s “adjustment” until next Tuesday, it’s likely that – at first glance at least – the measures to be announced won’t cut as deeply as the austerity budgets that have preceded it.
The major tax revenue raising measure in this year’s exercise is likely to be one we are all already starting to come to terms with – Local Property Tax.
Introduced earlier this year, the tax, which is levied on the value of properties across the State, has already generated about €200 million. However, familiarity won’t ease the pain when the full year impact comes into effect in January and it’s still likely to cause some pain. Apart from that, the perception is now that people can’t simply afford to give up any more income. There is just no bite left to take from the apple.
Given the particularly onerous hit those on lower incomes have already taken, we’re unlikely to see any changes to either tax rates or bands. So, by and large, families may emerge from this budget with a similar amount in their take-home pay each month, couple with the recent announcement that children under 5 will receive free GP visits means this budget will be an easier one on the pocket for Irish people.
Higher earners, particularly those coming close to retirement, may be hit by the likely diminution in the maximum pension fund allowable for tax purposes.
Families with public sector employees are unlikely to see any specific measures aimed at them, given that a lot of their terms and conditions are being dealt with in the Haddington Road agreement.
Still, while the headlines might be thankfully free of major tax hikes next Tuesday, the Government is likely to look to raise additional tax revenues in a more insidious fashion.
As always any changes or updates to taxation rules will be catered for in the 2014 Thesaurus Payroll Manager and 2014 BrightPay.