Daryl Hanberry, Tax Partner and Head of Tax & Legal, Deloitte Ireland, commented: “Today’s Budget is broadly targeted at individuals and in particular the squeezed middle, with most of the tax package aimed at increasing income tax bands credits and reducing rates of USC. The introduction of new National Investment Funds is prudent and well timed. We would have hoped for more material reform to the SARP and KEEP schemes. With the impending Pillar Two reforms, the introduction of the increased rate of R&D relief is too welcomed."
“For nearly three years now there has been no tax relief available on mortgage payments. The re-introduction of relief by way of a new targeted temporary tax relief for mortgage interest payments in Budget 2024, is a welcome cost of living measure.”
Commenting on the personal tax system and reduction in USC, Daryl Hanberry, continued: “The reduction in the middle USC rate from 4.5% to 4% and the increase in the threshold to €25,760 per year for the 2% rate will benefit many taxpayers, particularly the squeezed middle. A competitive and effective tax policy is a vital part of Ireland’s position in retaining and attracting talent in a world which is highly digitalised and mobile. This is critical both in the context of inward investment to Ireland and supporting indigenous business and entrepreneurs.”
On the Special Assignee Relief Programme (SARP) Hanberry said: “The Special Assignee Relief Programme (SARP) is an effective and competitive opportunity to attract top talent to Ireland and is vital to Ireland’s position in retaining and attracting Foreign Direct Investment. Despite the potential of this tax policy, the relief is insufficient and too restrictive. While there was no reference to SARP made by the Minister today, we hope to see further detail in the finance bill when published.
Supporting smaller businesses is also important. The Key Employee Engagement Programme (KEEP) aims to help smaller firms who cannot compete with larger firms in cash remuneration terms to attract and retain talent in a challenging labour market. However, it is not achieving its objectives.
We also welcome the EU State Aid approval of the changes introduced to the programme which were first announced in last year's budget. We will continue to engage with Government on how this scheme can be enhanced to be more effective.”
Support for domestic business and entrepreneurship in Budget 2024 welcome but more targeted measures required
Budget 2024 has been framed against the backdrop of a turbulent economic environment. Speaking today Daryl Hanberry, Head of Tax & Legal and a partner at Deloitte, said:
“It is crucial that Ireland continues to focus on the supports necessary to foster and grow our entrepreneurial community. In particular Deloitte called for a tax system to facilitate start-ups but also to incentivise founders to remain and scale up their businesses. We are looking forward to engaging with the Minister on the operation of the Angel Investors scheme.
“Additionally, we would have some concerns around cost pressures from increased rates of PRSI, the national minimum wage - which will impact this sector disproportionality - and how the KEEP scheme can be enhanced to be more effective.”
Reacting to the Budget today, David Shanahan, Partner, Tax & Legal said; “We welcome the package of measures introduced today which will benefit indigenous businesses such as changes to R&D tax credit regime, improvements to Employment Investment Incentive Scheme (EIIS) and the introduction of a reduced rate of capital gains tax for angel investors.
Various stakeholders had called for changes to help unlock investment in indigenous companies and it is encouraging to see they have been heard. While the above measures are very welcome there is a need for a further comprehensive suite of measures to support entrepreneurship and to encourage founders to retain ownership and to scale their businesses. One such example would be a lower rate of income tax on certain qualifying dividends.
“Another area for consideration would be a series of supports to encourage more companies to IPO and to retain their listings on the Dublin Euronext stock exchange. A measure which could have an impact, as part of broader measures, would be the removal of stamp duty on listed shares.
Shanahan said the company will engage with the Minister, his officials and Government colleagues to advocate for a more comprehensive package of supports for indigenous businesses.
