Just ahead of a general election later this year or early 2025, with news of much better-than-expected corporate tax receipts and the present of the €14 billion Apple funds money meant we were in for a more than generous budget.
With a Budget package of €10.5bn, workers and households emerged as the real winners with a “something for everyone” approach.
Business
We in Bridge Enterprise Centres expected the Budget to provide a crucial chance for Government to assist businesses and individuals grappling with ever- increasing costs.
While there was some support for private businesses, the Budget lacked substantial tax measures to help them manage rising costs, increased regulations, and complexities. It still remains that more pro-growth initiatives are necessary to encourage entrepreneurship.
The commitment to unlock the National Training Fund (NTF), which is financed by employers’ PRSI, is an important and long overdue step. This will allow for an increase in spending on training and upskilling in SMEs is welcome. The details on this aspect will be interesting.
Infrastructure
We welcome the attempt to address the national infrastructural limitations in our competition for inward investment. Budget 2025 contains significant additional investments in, energy, housing and transport which are very welcome, however the next Government has much more to do which will require the increased and ongoing commitment.
Finally
Economic growth is strong, corporate tax receipts continue at a high level, employment is at record levels, and adding to all of this the coffers have been bolstered by a massive €14 billion Apple windfall.
If ever there was an opportunity to boost the wealth generating SME sector it was now to ensure a continuance of a home-grown sector. This Budget lacked substantial measures to do this.
The use of the once-off-payments ‘goodie bag’ and ‘something for everyone’ in so many areas demonstrated that the priority was clearly the re-election of the coalition and not the support of the indigenous small, medium and family sector (SME).
– MF 02/10/24.
There may be further changes in the Finance Bill next week, so ensure to keep an eye out for further updates from our team at Bridge Enterprise Centres.
See headline items announced in Budget ’25 below.
MAIN POINTS IN BUDGET 2025.
Cost of living
- Overall €2.2 billion package.
- Reduced 9 per cent VAT on electricity and gas extended until April 30th, 2025
- €250 worth of energy credits – split over two payments, one this year, the other in new year
- Minimum wage to increase by 80 cent from January 1st, 2025, rising to €13.50 an hour
- Childcare: Full-time costs will be reduced by €1,100 under 44 per cent increase in the National Childcare Scheme.
Welfare
- Weekly social protection payments to increase by €12, including State pension
- ‘Baby boost’ payment of €420 for new parents
- €400 lump sum payment for Working Family Payment recipients
- Two double child benefit payments, in November and December @ €280 per child
- October bonus double payment for recipients of long-term social protection payments
- Increases for maternity, paternity, adoptive and parents’ payments of €15
Business & Work
- Raising the VAT registration thresholds for the supply of goods and services to €85,000 and €42,500 respectively
- Extension of the 9% reduced VAT rate for gas and electricity by 6 months to 30 April 2025
- Energy Subsidy Scheme for retail and hospitality businesses worth €170 million
- Temporary universal relief on BIK regime for company cars extended for further year
- Increase in the first year payment threshold in the R&D tax credit, from €50,000 to €75,000
- €78 million for the growth of the craft apprenticeship system to 6,800 apprentice registrations in 2025
- Funding (as yet unspecified) for upskilling in micro, small, and medium enterprises
Tax
- The Income tax package is worth €1.6 billion
- Higher rate of tax to rise to €44,000
- Personal tax credit increases will include: €125 personal tax credit, €150 home carer tax credit, €150 single person child carer tax credit, €300 incapacitated child tax credit, €300 blind person’s tax credit.
- USC cut: Entry level for new 3 per cent rate increased by €1,622 to €27,382
- Amount of tax-free money an employer can give employees as bonus payment to increase to €1,500. The minister told the Dáil that he will permit five non-cash benefits to be granted by an employer in a single year under this exemption
- Inheritance tax: Capital Acquisition Tax thresholds to increase from €335,000 to €400,000
- Properties worth over €1.5 million to pay 6 per cent stamp duty
Housing, landlords, renters and mortgages
- Department of Housing to be allocated €7.8 billion – including €2 billion for construction of 10,000 social homes
- Rent tax credit to rise by €250, to €1,000 and €2,000 for a jointly assessed couple for 2025
- Extension of the Help to Buy scheme to 2029 as well as mortgage interest relief scheme to 2025
- Landlord letting extension scheme extended
- Vacant Homes Tax rate to increase from five to seven times the property’s existing base Local Property Tax rate
- Mortgage interest relief extended for another year; stamp duty on bulk purchases of homes to increase from 10% to 15%
Health
- Additional €2.7 billion to be given to health sector over two years
- 495 new beds to be introduced in hospital and community services
- Exemption from income, capital gains and capital acquisitions taxes on payments to women impacted by Cervical-Check screening failures
- Continued support for women’s health measures, including increased access to IVF and Hormone Replacement Therapy free of charge
Alcohol, cigarettes, vaping
- €1 increase in excise duty on packet of 20, bringing cost to €18.05 from midnight following a Dáil vote on excise duty
- Tax to be introduced from mid-2025 of 50 cent per ml of e-liquid in vapes, bringing typical price of disposable device to €9.23 including VAT
- No increase to alcohol excise duty
Climate
- €3 billion package to be set aside for climate transition between 2026 and 2030
- VAT on heat pump installation to be reduced to 9 per cent
- Carbon Tax rate per tonne of carbon dioxide emitted for petrol and diesel will go up €7.50, from €56 to €63.50, from October 9th
Public transport and infrastructure
- €14bn Apple tax windfall will be invested in water, electricity, transport and housing to “ensure the further development of our society”
- Free Public Transport expanded for all children under the age of 9
- Over-70s can bring another person on public transport free of charge in new ‘Universal Companion Pass’ measure
- Ongoing investment of almost €1 million per day in cycling and walking infrastructure in package
- €3 billion bundle for infrastructure including water and energy
Education
- Free schoolbooks up to Leaving Cert level
- Exam fees for Junior and Leaving Certs to be waived
- Hot meal programme to be expanded to all primary schools in 2025
- Funding for 786 additional special education teachers and 1,600 more Special Needs Assistants
Justice and defence
- €3.9 billion allocated to Justice sector including provision for recruitment of further 1,000 gardaí and 350 prison officers
- International protection processing system to be expanded with hiring of 400 additional staff
- Net increase of 400 new Defence Forces personnel in 2025
