Budget speculation - avg PAYE worker

Dannyboy83

Sorry if this has been done elsewhere; haven't seen it if it has.

Just speculating on the realistic changes incoming in this budget and how your average PAYE worker will be hit.

Some of the things I guess we will see:
A) 2% income levy in the form of PRSI (same again next budget)
Water charges in this budget (Property tax at next budget)
C) 1% vat increase
D) Reduction in tax credits //or// Lowering tax band to €32k per annum, higher band after €32k
E) Excise increases on alcohol
F) Fuel duty (3-5c per litre?)
G) Road Tolling on primary roads


Does this look vaguely accurate?

Count Dooku

Dannyboy83 wrote: »

C) 1% vat increase

Pound back to 0.89 and newry bypass finished :rolleyes:

seamus

Dannyboy83 wrote: »

A) 2% income levy in the form of PRSI (same again next budget)

They'll consolidate all of the levies into a single pre-Income Tax levy, and probably bump it by 1%.

Water charges in this budget (Property tax at next budget)

Implementation will take too long. They might introduce blanket water charges (say €200 per home), but they will definitely introduce the mechanism for installing water meters in homes with a view to starting metering in 2013. Similar for property tax.

C) 1% vat increase

No way. Economy killer. They won't touch VAT, if they do, it'll be to reduce it. They need to stimulate everyday consumer spending.

D) Reduction in tax credits //or// Lowering tax band to €32k per annum, higher band after €32k

Both IMO. We'll see a big drop in tax credits to bring anyone earning over €15k into the tax net. The higher rate band will probably drop to €32k, seems like a good bet.

E) Excise increases on alcohol

Definitely.

F) Fuel duty (3-5c per litre?)

Possible, but not without another adjustment to motoring costs. Fuel duties increase the cost of goods to the consumer which discourages spending.

G) Road Tolling on primary roads

Not within the scope of a national budget IMO.

Dannyboy83

Count Dooku wrote: »

Pound back to 0.89 and newry bypass finished :rolleyes:

LOL

seamus wrote: »

No way. Economy killer. They won't touch VAT, if they do, it'll be to reduce it. They need to stimulate everyday consumer spending.

Interesting, I recall people saying that in 2009 too.
The UK are increasing their VAT rate to 20%, which presumably removes one of the main obstacles with cross border shopping etc.
The difference was 4%, at at 1% increase it would be only half that.

Dannyboy83

seamus wrote: »

Possible, but not without another adjustment to motoring costs. Fuel duties increase the cost of goods to the consumer which discourages spending.

Agreed, inflationary tax, but this didn't deter the Green Tax in 2009.

Ideally, this government should seek to encourage consumer spending and provide incentives for doing so.
I imagine that's near impossible in light of all the cuts and levies tho, hence I just expect that if they cannot encourage people to spend, they will simply remove the money at source.

seamus

Dannyboy83 wrote: »

Interesting, I recall people saying that in 2009 too.

He rolled back from 21.5% last year to 21%. He had failed to spot in 2008 that consumer spending was collapsing, and he slapped an additional tax onto the cost of goods to compensate for falling revenues all over the shop. Rookie mistake, except that he's not a rookie :rolleyes:

The UK are increasing their VAT rate to 20%, which presumably removes one of the main obstacles with cross border shopping etc.

Psychological barrier moreso than anything. A 4% difference in VAT is still only €4 on €100. For most people, unless you're buying €2,000 worth of goods in NI, then petrol and time that you'll spend making the trip doesn't justify a 4% saving on your purchases. However, goods are generally cheaper in NI as it is, lower VAT is really a cherry on top. Strong sterling is the best thing to prevent cross-border shopping and it's great for exports.

Fitz123

As has been said, Income Levy, PRSI all to be rolled into one super tax, celing perhaps to be gone on this.

Agree on the tax credits / SRCOP also being cut.

I think vat will stay where it is.

I believe our early retirement allowances will be looked at, so foresee a change to top slicing relief and standard capital superannuation benefit formulae

Also think that perhaps on a phased basis there will be an announcement on relief for pension contributions ie. relief will be granted somewhere between the marginal rate and standard rate.

Nody

• Tax credits lowered slightly (in parallel with SW) and then gradually removed as people earn more (i.e. at lets say 50k all tax credits are removed)
• SW lowered slightly to keep the lowest paid rate to be the same percentage as today with tax credit going down
• More tax on tobacco and alcohol
• Some minor loopholes for pension closed / limits lowered
• Lower higher tax rate band (32k sounds about right)
• New high income tax band starting at 75k
• Bonus tax (such as the one done in UK)
• Higher PRSI rates (or some combination of general increase or combination into 1 tax)
• Water tax per household (fixed amount per house / apartment)
• Fuel tax up by 3c per litre, farmes exempt
• Lower the below 25 JA by another 25 EUR or extend it to 27 and down for reduction
• Remove the tax credits for people renting
• Lower the child allowance by 10%

I don't expect FF has the guts to do anything drastic so I expect nip and tucks all over the budget rather then a few big bangs of pains.