Finance Minister to slash additional USC for self-employed

Finance Minister, Michael Noonan has confirmed he will reduce the difference between the Universal Social Charge (USC) paid by self-employed professionals and PAYE workers in the upcoming Budget.

At present, entrepreneurs pay three per cent more in USC on their earnings over €100,000 than PAYE employees earning the same money.

This has long been a bone of contention for the self-employed, with many of the belief that the additional USC effectively penalises and entrepreneurship and Mr Noonan has confirmed he seek to narrow the gap in the next Budget.

It’s also thought that the overall rate of USC paid by PAYE workers and the self-employed could be slashed by as much as two per cent.

The Government anticipates strong tax receipts providing them with an additional €1.5bn to distribute; however a bumper tax take in August could result in even bigger pot to return to the taxpaying public.

Aside from the USC ‘gap’, around €300m is set to be spent on already-agreed wage increases for civil servants.

Additional funds are also expected to be allocated for more free crèche time for toddlers, targeting mothers attempting to return to the workplace.

At present, monthly costs at a crèche for a small child can amount to €1,150, meaning parents must earn up to €30,000 a year in order to fund the cost of childcare for two children.

A recent report found that 84 per cent of stay-at-home mothers were keen to return to work in some capacity but felt ‘trapped’ by childcare costs.

In response, the Government aims to extend and improve the Early Childcare Scheme, which already provides a free year of care for children of pre-school age.

It’s reported the Government is also considering tax breaks and additional incentives to lure back ex-pat professionals in finance and engineering roles back to Irish shores.

Skills shortages in these sectors have forced the Government to examine how to entice workers these skilled professionals – who moved away during the recession – to return back to the country.



Image: ECB

Date published 7 Sep 2015 | Last updated 7 Sep 2015