Income Tax & USC 2022 Budget Highlights
October 20, 2021
| Tax Rates and SRCOPs There have been no changes to tax rates for 2022. The standard rate will remain at 20% and the higher rate at 40%. The SRCOPs for 2022 have been increased as follows.  The SRCOP applicable under the Emergency Basis of tax will increase from €679 to €708 per week, from €1,358 to €1,416 per fortnight and from €2,942 to €3,067 per month. |
| Personal Tax Credits The following changes to tax credits will apply: Single/ Widowed Person or Surviving Civil Partner Tax Credit The Single/Widowed Person or Surviving Civil Partner tax credit will be increased by €50 from €1,650 to €1,700. Married Couple or Civil Partnership Tax Credit The married couple or civil partner tax credit will be increased by €100 from €3,300 to €3,400. Employee (PAYE) Tax Credit The Employee (PAYE) tax credit will be increased by €50 from €1,650 to €1,700. Earned Income Tax Credit The Earned Income tax credit will be increased by €50 from €1,650 to €1,700. Sea-Going Naval Personnel Tax Credit This tax credit will be extended for 2022. |
Universal Social Charge (USC) There was no change to the USC exemption threshold of €13,000. There has been no change to the rates of USC. The threshold for the 2% rate will be increased by €608 from €20,687 to €21,295. For 2022, USC will apply at the following rates for those earning in excess of €13,000:
Non PAYE income in excess of €100,000 will continue to be subject to a 3% USC surcharge. Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will continue to pay a maximum rate of 2% in 2022. The rate of 8% USC will continue to apply under the Emergency Basis.
| Employment Wage Subsidy Scheme (EWSS) The EWSS will be extended until the end of April 2022 in a graduated form. The main points are as follows: The current rates will be retained for October and November 2021. Those employers availing of EWSS on 31 December 2021 will continue to be eligible until 30 April 2022, assuming they meet the eligibility criteria which will continue to be a 30% reduction in turnover/customer orders in 2021 compared to 2019.EWSS will close for new claims from 1 January 2022. For December, January and February, the original two tier structure will apply as follows:  For March and April 2022, a flat rate subsidy of €100 will replace €203 and €150. The rebate of Employers’ PRSI will no longer apply for these 2 months. |
| Remote Working An employer is permitted to make a tax free payment of up to €3.20 per working day to remote workers to cover additional utility costs incurred by employees working from home. Where an employer does not pay €3.20 to an e-worker, employees will be able to claim tax relief on 30% of the cost of vouched expenses for heat, light and broadband in respect of those days working from home. Extension of BIK Exemption for Electric Vehicles The BIK exemption for battery electric vehicles will be extended out to 2025 with a tapering effect on the vehicle value 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. Taxation of Flight Crew Irish legislation provides that the employment income of a member of a flight crew is taxable in Ireland where the employment is exercised onboard an aircraft operating in international traffic and the place of effective management of the company operating the aircraft is in Ireland. The Budget provides for an amendment to exclude non-resident air crew where certain conditions are satisfied. Further detail will be included in the Finance Bill 2021. Expansion of Debt Warehousing The tax debt warehousing scheme will be expanded to allow proprietary directors to warehouse income tax liabilities relating to their Schedule E income from that employer company. Tax treatment of income from micro-generation of electricity A tax disregard of €200 is being introduced in respect of personal income received by households who sell residual electricity, which they generate, back to the grid. Help to Buy (HTB) Incentive The Help to Buy (HTB) incentive scheme which allows first time buyers to claim a refund of income tax and deposit interest retention tax up to €30,000 will be extended for 2022. Pre-letting Expenses Landlords are entitled to claim a deduction (capped at €5,000 per premises) from rental income for certain pre-letting expenditure. This will be extended for a further 3 years until the end of 2024. |