2024 Irish Budget: What's in it for Tradespeople

The 2024 Irish Budget brings both opportunities and disappointments. Homeowners have more money, increasing demand for tradespeople. However, the construction sector lacks VAT reductions and efficient planning measures.

The 2024 Irish Budget has been unveiled, and it's a mixed bag. While there are some missed opportunities for meaningful investment in the sector, there is more money in the back pockets of homeowners, which will bring opportunity and drive demand. Here's our assessment of what this budget means for self-employed tradespeople.

Tax and PRSI

The earned income tax credit will increase to €1,875 from January 1st, 2024, benefiting self-employed tradespeople.
All other measures including standard rate band increases, personal tax credits, and USC apply to both employed and self-employed individuals. For example, the higher rate of income tax will now apply at €42,000, and there will be a 0.5% cut in the USC rate, bringing it down to 4%. Additionally, the 2% USC band ceiling will increase by €2,840 to €25,760, and the earned income tax credit will rise by €100 to €1,875.
Employer PRSI: The upper threshold for paying the 8.8% Class A rate of employer PRSI will increase, benefiting businesses with staff. Additional incentives to promote employment in the construction sector would have been more impactful.
Calls to remove the 3% USC surcharge on non-PAYE income were unfortunately ignored.

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Cost of Living

While the budget does not raise the price of a pint or bottle of wine, it does impose a 75c increase on a packet of cigarettes. Additionally, the potential introduction of domestic taxes on e-cigarettes and vaping products in the next budget could further affect trade pros' disposable income.

Apprenticeships

The allocation of €67 million to support 16,000 craft apprenticeships is a positive step. However, the devil is in the details, and the effectiveness of this measure will depend on how it's implemented and whether it successfully attracts new talent to the construction industry.

Motoring

The planned increase in fuel excise, which was set to be implemented at the end of October, has been delayed. Last year, excise cuts were introduced to alleviate the cost of living crisis. These cuts will now be reinstated in two stages, on April 1st and August 1st of next year. As filling stations replenish their supplies, the carbon tax hikes will be reflected in pump prices, as stated by Blake Boland, head of communications at AA Ireland. Read: How you can save over €3,900 on petrol and diesel costs.
The relief provided for employees with electric company vehicles is beneficial, but it may have limited relevance to many self-employed tradespeople who rely on their own vehicles for work. The extension of VRT relief for battery electric vehicles is a step in the right direction for the environment but may not directly impact the construction sector.

Missed Opportunities

The budget disappointingly does not include a reduction in the construction VAT rate or materials VAT, which could have provided much-needed relief to the construction industry.
The increases in the entry points for VAT registration for businesses supplying goods and services may ease the administrative burden but fall short of addressing broader industry challenges.
To address CIF's call for increased investment in the planning system, it is imperative to prioritise infrastructure and housing development. The budget should have encompassed measures to enhance the efficiency of planning processes.

Budget 2024: Good News for Trades, More Money for Irish Homeowners

Here's what you need to know:

Tax Benefits: The widening of the top tax band by €2,000 means that individuals won't pay the highest tax rate of 40% until they earn above €42,000. For a single person with an income of €70,000 (or a married couple with a combined income at the same level), this change translates to an extra €400 in their pockets each year.
Universal Social Charge (USC): The higher rate of the USC is dropping from 4.5% to 4%, putting an additional €235 in their pockets next year. Plus, the changes to the entry rate to the lower USC rate will save Irish earners an extra €71.
Tax Credits: Changes to tax credits add another €200 to their savings. If they have a single income of €70,000, they'll pay €906 less in taxes in 2024 compared to 2023. Even if they earn €55,000, they'll still enjoy a reduction of about €830 in income tax.
Mortgage Interest Relief: If they have a home loan ranging from €80,000 to €500,000, they're in for some financial relief. The mortgage interest relief is set to decrease their annual expenses by around €700.
Energy Credits: Prepare to have a merrier holiday season! They'll receive three energy credits on their electricity bills worth a total of €450. One credit will arrive before Christmas, and two more will follow in the New Year.

Budget 2024 will see homeowners' finances improve, leading to more opportunities for investments in homes and creating new avenues for self-employed tradespeople. It's a win-win for everyone!

Boosting Demand for Sustainable Energy: Highlights from the Budget

The proposed increase in the vacant property tax and the extension of the Help-to-Buy scheme are promising measures that could have a positive impact on demand for Builders and Trade Pros.
Extending VAT relief on solar panels for schools, along with the increase in the exemption from income tax, PRSI, and USC for profits and gains earned from domestic electricity generation will boost demand for solar energy installers. This, along with incentives for residential installations, creates more opportunities for self-employed tradespeople in the green energy sector.

In conclusion, although the budget does little to directly support trade pros and their businesses, trades will benefit from the increases to tax credits, plus the boost in disposable income for homeowners is bound to create a surge in demand for home improvement and green energy sectors.