Budget 2019: Self-employed tax savings

A. There will be three main changes in Budget 2019 that will affect your take home income after tax next year.

Firstly, the point at which you start to pay tax at the higher rate of 40% will be increased by €750 from €34,550 to €35,300 saving you €150 per year.

Also, the Earned Income Tax Credit has been increased to €1,350 saving you a further €200 per year.

This tax credit was due to be raised to the same level of the Employee Tax Credit of €1,650 by 2018, but as you can see, self-employed people are still being penalised to the tune of €300 per year.

Finally, a cut in the third rate of USC from 4.75% to 4.5% along with some movements on the USC bands will save you a further €102.

That’s a tax saving of €452 in 2019, or roughly €9 per week.

In general, the self-employed can expect a tax saving of between €4 and €9 per week.

These savings may be offset by tax increases elsewhere in particular if you have employees, as the rate of Employers PRSI is increased by 0.1% in 2019 with a further 0.1% increase expected in 2020.

The above analysis is relevant for a single self-employed person with no children.

If you’d like to discuss further what an accountant can do for your business or personal tax affairs, please feel free to contact your local TaxAssist Accountant on 1890 987 609 or email us here 
 

Date published 9 Oct 2018

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.