Dirt to 41% + 4% PRSI = 45%; no USC

So if I have been a prudent saver who has not bought a house etc. and am due about 4000euro gross interest I must now give away a further 4% of the whole sum of this in PRSI without getting anything in return? Unbelieveable!!...savers and the prudent punished once more.

Take it that savers will have to file a return around October 2015 for any eligible interest earned in 2014? How many PAYE workers with no other income will know how to do this, even remember how to do it or forget how to do it? Will this be incorporated into PAYE anytime? For those who of us who always want to stay tax compliant this whole thing is a farce. Come next elections think I’ll vote for any politician who exposes the absurdity of it all. What chance that any of them might?
 
BeyonddePale said:
Take it that savers will have to file a return around October 2015 for any eligible interest earned in 2014? How many PAYE workers with no other income will know how to do this, even remember how to do it or forget how to do it? Will this be incorporated into PAYE anytime? For those who of us who always want to stay tax compliant this whole thing is a farce. Come next elections think I’ll vote for any politician who exposes the absurdity of it all. What chance that any of them might?
Click to expand...

Yes, many of us have thought along those lines but its especially annoying that they insist on making us file a self return on it.

The weak and blatant attempt to make the tax hike sound less worse by virtue of collecting almost half of it as "PRSI" is almost more infuriating than the tax hike itself. (guess they couldn't use levy after the income levy, health levy, insurance levy, pension levy, investment levy etc...)

Now add the idiocy of having to file it via an intimidating tax system (come on would more than 1% of PAYE workers have any idea how to self assess and all the implications of it?)
 
CiaranT said:
Surely, the accrual period has nothing to do with it, like with DIRT. The payment date, rather than the accrual period, is surely what matters.
There is a PRSI minimum threshold but there is no PRSI 'free allowance'. Hence, one cannot simply deduct 3,174 if they get more than 3,174 in unearned income per year.
Click to expand...

Correct. I think some people are making this more complicated than it is. It seems pretty straightforward. The PRSI liability is on your unearned income (including deposit interest) paid within a tax year. If you are above the threshold you pay PRSI on all the income. It doesn't matter when the income was earned/accrued, only when it was paid.

I will be making the assumption, until advised otherwise, that the tax free portion of State Savings will also be PRSI free. On the current form 11, there is a box for "deposit income on which DIRT has been deducted" and one for "deposit income on which DIRT has not been deducted". As far as I understand it, you do not currently have to declare your non-DIRT interest from State Savings in either of those boxes. If they introduce a new box specifically for State Savings, I'll fill it in, otherwise I won't be mentioning it.

The new rates do seem pretty draconian. Before Budget 2013 it was 30% (already up from 20% a few years ago), after Budget 2014 it's 45% including PRSI. Last year I paid slightly more tax on deposit income than someone earning the same amount from employment. Next year, I'll pay 50% more tax than a PAYE worker earning the same amount.
 
I know I am cutting off my nose to spite my face but I refuse to pay these thieves 45% I will therefore not keep funds on deposit anymore it's not as if the returns are anything to shout about anyway and after this ridiculous tax hike there even less attractive! .

Luckly I manage to close down some deposits early to extract the interest at 33%, 45% is a bridge too far.

The whole thing is just a joke all through history people have saved and not been reckless now this stupid government want people to spend spend with reckless abandonment because they have been totally clueless in there approach tax until the pips squeak won't work......
 
Couldn't agree more with paulgreen....this is legalised robbery in my opinion. To even consider interest as "income" is debatable...most bank accounts are barely on a par with the inflation rate. Time to consider pulling every cent out of this country! Heard a talking head from the construction industry banging on about why we should spend, spend, spend and not save. This dirt move is a vicious attack on the prudent and utterly reprehensible. There is a group in the UK called "Save our Savers"...we need a campaign here in a similar vein to fight the idiocy that permeates public policy.
 
Given a tax take of 45% from 2014 for monies held on deposit, would one be better off diverting some of their monthly savings from Deposits to their Pension plan and availing of the generous tax relief

A 5% gross return on a pension is 5%

A 5% gross return on a deposit is 2.75% net

Any views?

Bedlam
 
There's no tax relief on putting your savings into a pension. The tax relief is on PAYE income. Also, your pension returns are variable, and possibly negative, unless you put in cash in which case you are earning no more than if it was on deposit. And you pay fees and charges, and the government mugs you for a portion of if every year currently. Also, you can't access it until pension age. No thanks, I rather have my money under my own control (at least until the government raids it in a wealth tax).
 
People say its a simple manner of filling out a form declaring interest paid that year. But its not that simple. For example, with some accounts it's up to you when you decide to have the interest calculated and added to your account. But I suppose the geniuses in government circles never thought of this?
 
Also, does one have to go chasing interest certs from financial institutions? Have tried to contact government local representatives about this, but as yet no reply. But then , do they have a clue?
 
You must log in or register to reply here.
Back
Top