Comments
Our observations on the national budget are primarily focussed on SMEs and their owners and managers The people who take risks and create jobs in our economy. These SMEs account for 99.7% of all businesses and account for 70% of all private sector employment in Ireland. More than 900,000 of Ireland’s 2m workforce are employed by an SME.
It is more than disappointing that nothing was done to stop the discrimination against the self-employed through the higher rate of 3% USC tax. These self-employed take the risks, contribute so much tax and employ so many. There is no objective justification for this discrimination.
The further increase in the National Minimum Wage (NMW) not merely lifts wages by another 4.8%, it also increases employers’ PRSI, putting more pressure on business.
We welcome the reduction to 9% VAT rate given to the Tourism and Hospitality sector which we expect to be successful in stimulating demand, creating jobs and attracting tourism.
The total Tax Package has been reduced by €200 million and a more targeted spending on supports for the most vulnerable. This means taxation measures of €1.3 billion, not the €1.5 billion promised.
A contingency fund of €1 billion set up to respond to spending pressures and to cover the costs of hosting the EU presidency next year
Personal tax and minimum wage
- No changes in personal tax package
- Minimum wage goes up by 65c to €14.15 per hour
- To avoid penalising minimum wage earners, the USC 2% rate band rises to €28,700
Welfare
- €2 billion increase in spending for the Department of Social Protection
- €10 across-the-board increase to core weekly welfare payments incl. the old-age pension
- A “Christmas bonus” double payment has been confirmed
- Child support payments will increase by €8 for under 12s and €16 for those aged 12 and over
- Eligibility for fuel allowance has been extended to those receiving working family payments
- Income thresholds for the working family payment increased by €60
- The income disregard for the carers’ allowance to increase for a single person to €1,000 and a couple, to €2,000
- Domiciliary Care Allowance increases by €20 to €380 per month
- The Fuel Allowance rate has increased by €5 weekly to €38
VAT
- The VAT rate on hospitality will be reduced from 13.5 per cent to 9 per cent from 1stJuly 2026
- VAT rate for completed apartments is cut to 9 per cent from 13 per cent from tonight until end of 2030 to encourage development
- Lower VAT of 9 per cent on utility bills will be extended for three years to the end of 2028
Enterprise & Business
- The R&D credit rate will rise from 30 per cent to 35 per cent
- Research and Development tax credits will be overhauled
- The first-year payment threshold rises to €87,500 to support smaller projects
- CGT revisions: entrepreneurial relief reformed with the lifetime limit up from €1 to €1.5m
- The Special Assignee Relief Programme has been extended for five years and increased min qualifying income to €125,000 pa.
- Lower VAT of 9 per cent on utility bills will be extended for three years to the end of 2028
- BIK regime for company cars extended on a tapered basis – worth €10,000 next year, €5,000 in 2027, and €2,500 in 2028. It will be abolished in 2029.
- The €5,000 VRT relief for EVs has been extended to the end of 2026
- Banking levy extended by another year with a target yield of €200 million
- Total funding for the Department of Enterprise will be €1.3 billion, including more funding for Enterprise Ireland, the IDA and other enterprise offices
- The Section 481 film tax credit will see a new 40 per cent rate of relief for productions with €1 million of spending on relevant visual effects work, up to a maximum of €10 million per production
- The Digital Games tax credit will be extended for six years until the end of 2031
- €5 million for the Post Office Network
- €433 million for the National Broadband Plan
Other Items of Note
- Up to 1,000 additional gardaí in 2026
- More money for body cameras, prisons victim support, youth diversion and domestic violence programmes
- The rent tax credit is being extended for three years.
- The mortgage interest credit is being extended for two years
- The weekly fuel allowance rate will go up by €5 and has been extended to those eligible for the working family payment
The old reliables
- Motorists are facing a rise of just over 2c per litre at the fuel pumps
- The price of a packet of twenty cigarettes is increasing by fifty cent, with a pack now just under €19
MF 07/10/25.
