'Everyone will be a little bit better off on tax but no huge moves'- Tax expert
Published 11/10/2016 | 07:45
A tax expert has said that "everyone will be better off" on the 2017 Budget but "no huge moves" are expected.
Cora O’Brien, Tax Policy Director at the Tax Institute, told RTÉ's Morning Ireland: "It’s unlikely that this evening anyone will be too excited."
She said there are a "number of small changes" to the budget that will affect many different groups.
"The main moves on the budget this year are on the expenditure side. On the tax side the story is, it’s small changes across a lot of different groups. It’s unlikely that this evening anyone will be too excited."
In terms of the USC Ms O'Brien said we can expect a 0.5pc drop in the first few rates.
"If you’re earning €18,000 a year you’ll have an annual saving of €90 a year. If you're on €35,000 you’re saving €170 a year, €75,000 you're saving €350 a year. However €350 is the maximum USC that’s available.
"In the middle income category we’re starting to close the gap with the UK. Everybody is getting a little bit and they’ll be glad."
Ms O'Brien said that in terms of income tax "we’re not expecting changes".
"The change that could have been made would have been to the €33,800 entry point to the higher income rate but that doesn’t seem to be happening."
In terms of pension she said there will be a package but it will be delayed until March or April with no changes on the tax side.
She said the real tax changes are for first time buyers.
"There will be either a tax refund or a grant. The effect is probably going to be the same. It’s going to be a new regime applying to new builds only with the maximum benefit capped at €20,000."
In terms of childcare Ms O'Brien said there will be a a "big expenditure package".
"The big expenditure package on childcare will be capped at income levels of €47,000 for families with one child. On the tax side for families who are looking after children at home there is a small increase to the home carers' allowance. It’s currently €1,000, it will go up to €1,100. For families there might also be a reduction in the DIRT rate for savings from 41pc down to 39 pc. Inheritance tax thresholds will also go up."
Due to cross border trading she said there will be no change in the price of alcohol and petrol but cigarettes will increase by 30c.