Devil is in the detail... but new tax credit for self-employed has been needed
My Budget: The professional
Julie Herlihy, the tax consultant and director of Herlihy Tax Consultancy, said that the stand-out features of the Budget for her were the introduction of the €550 tax credit for self-employed people and the changes to the USC rates and bands.
"The tax credit is something that has been needed for a long time to bring more equality between the self-employed and those on PAYE," said Julie, who is in her early 40s, after listening to ministers Michael Noonan and Brendan Howlin deliver Budget 2016.
"I welcome the introduction of the €550 tax credit for self-employed individuals on that basis," added Julie, who lives and works in the Lucan area of Dublin.
She said the much-flagged decrease in the USC rates would result in an extra €900 a year for middle- and higher-income earners and would benefit her also.
"A lot of the Budget was leaked beforehand, so I suppose there were no real surprises. However, if you look at it now that it has been published you could call it a restrained but positive budget, in that it is of benefit to nearly everybody and not just one sector," she said.
"The Budget will put more money in most people's pockets. This should help increase consumer spending, which would generate more growth, more jobs and, indirectly, more taxes for the Exchequer.
"I'm not a smoker, so the extra 50c on the packet of cigarettes won't affect me.
"The extra €5 on child benefit is a positive for me because I have two young boys," she said.
Julie was critical, however, of the fact that self-employed people still don't have an opt-in PRSI scheme for future protection in the event of unemployment or illness.
"It would seem only fair that self-employed people could choose to be part of the same system, if they wished," she said.
"Also, those self-employed individuals among my clients who earn over €100,000 will remain disgruntled that their marginal tax rate remains at 55pc, which is 3pc more than employees on the same income," Julie said.
"However, the introduction of the 20pc Capital Gains Tax rate for business owners who trigger chargeable gains on the disposal of part or all of their businesses will help bring Ireland into line with countries with similar reliefs," she said.
"That said, this lower rate is only available in very limited circumstances".
Less useful to entrepreneurs, according to Herlihy, was the extension of the corporation tax exemption for start-up companies.
"Only a tiny proportion of start-ups have ever qualified for it and businesses run by professionals are specifically excluded. If it was more practically implemented, it could make a big difference," she said.
"The abolition of the pension fund levy is great news".
She also welcomed the introduction of the three-year increase in the capital acquisitions tax threshold from €225,000 to €280,000 for children inheriting family homes.
"As always, the devil will be in the detail of the Finance Bill, which will be published over the coming weeks," she said.