Who will be most disappointed with Budget 2018? The self-employed and residential landlords

[Steven Barrett]

will the sugar tax be ring fenced for obesity?

Are you joking me? Nothing is ring fenced in this country. When they stole €2bn from the private pension funds of its citizens to create jobs, I sent in a request asking how many jobs did it create. They didn't keep track! Great way to know if something is working or not. The €2bn was lumped into the general exchequer and spent/ wasted as usual.

The self employed (who can) should be all busy trying to work out which electric car to lease for themselves next year...

With Tesla's costing in the €140,000 range, it will have to be a Nissan Leaf for me

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[gnf_ireland]

Self-employed people are entitled to fewer benefits but they are entitled to those that make up the bulk of PRSI spending (primarily pensions).

But is there any guarantee that the self employed will be able to access the state pension in 20-30 years time? Will it be means tested by then etc? Its all well and good saying that they are contributing towards the pension if they will still be entitled to it.

 

[orka]

But is there any guarantee that the self employed will be able to access the state pension in 20-30 years time? Will it be means tested by then etc? Its all well and good saying that they are contributing towards the pension if they will still be entitled to it.

That's not a unique concern for the self-employed though. Employees paying 4% PRSI plus having 10.75% employers paid on their behalf would face any means-testing too.

 

[Sarenco]

Well, the accountants aren't too happy with the "ongoing tax discrimination against the self employed" -

https://www.irishtimes.com/business...loyed-to-pay-200-less-in-tax-a-year-1.3251092

 

[gnf_ireland]

That's not a unique concern for the self-employed though. Employees paying 4% PRSI plus having 10.75% employers paid on their behalf would face any means-testing too.

true, but I think I would be genuinely annoyed if after someone effectively paying 14.75% of my income I was means tested for the pension.
The self-employed get very little else for their PRSI contributions. At least the employees are entitled to dole if needed

I simply do not see why there is no action on this, and give a clear statement to people around the intentions in the area. Private pensions are badly funded as it is - constantly increasing the current state pension with no idea when the whole thing will implode is crazy.

 

[Sarenco]

The odd thing is that the 3% USC surcharge only raised €62million last year for the exchequer.

That's a drop in the ocean in budgetary terms - we spent over €20billion last year on social protection measures.

It almost looks like a deliberate attempt to penalise successful entrepreneurs.

Is that a sensible policy?

 

[Sophrosyne]

For anyone interested this is one of the related documents to Budget 2018. It is the Report of the Working Group on the Tax and Fiscal Treatment of Rental Accommodation Providers.

If you don’t want to read the entire document, the recommended options for change – short, medium and long term - are on pages 83 through 111.

There is also a summary of public consultation submissions in Appendix 2.

 

[Steven Barrett]

The odd thing is that the 3% USC surcharge only raised €62million last year for the exchequer.

That's a drop in the ocean in budgetary terms - we spent over €20billion last year on social protection measures.

It almost looks like a deliberate attempt to penalise successful entrepreneurs.

Is that a sensible policy?

People should be rewarded for being successful. If they are doing well, they will hire more people and add more taxes to the economy.

And if you are self employed and borderline on the €100,000, you are going to find ways to keep that income under the €100k threshold which may result in less money being paid to the Exchequer.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Duke of Marmalade]

And if you are self employed and borderline on the €100,000, you are going to find ways to keep that income under the €100k threshold which may result in less money being paid to the Exchequer.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

That says it all. The PAYE worker does not have ‘ways’.

 

[Firefly]

People should be rewarded for being successful. If they are doing well, they will hire more people and add more taxes to the economy.

And if you are self employed and borderline on the €100,000, you are going to find ways to keep that income under the €100k threshold which may result in less money being paid to the Exchequer.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Hi Stephen,

Say I earn 120k...am I correct in saying I will pay the normal USC charges, plus 3% on that extra 20K?

Firefly.

 

[Firefly]

That says it all. The PAYE worker does not have ‘ways’.

Hi Duke,

The PAYE worker doesn't need "ways" in this case though as this surcharge only applies to the self employed surely?

Firefly.

 

[Duke of Marmalade]

Firefly I was making something of a sardonic comment. I presume Stephen means by ‘ways’ that, for example, the self employed gal just might forget to declare that cash receipt, or maybe those expenses were not entirely connected with the business.

It is the general suspicion that many s/e under declare that underpins the surcharge. Very unfair I know for those who are totally compliant.

 

[T McGibney]

Firefly I was making something of a sardonic comment. I presume Stephen means by ‘ways’ that, for example, the self employed gal just might forget to declare that cash receipt, or maybe those expenses were not entirely connected with the business.

It is the general suspicion that many s/e under declare that underpins the surcharge. Very unfair I know for those who are totally compliant.

You're correct that it is very unfair. For starters, the tax defaulters lists regularly include PAYE workers, pensioners and other non-self-employed individuals, not to mention companies who are unaffected by the stupid USC surcharge.

 

[Sarenco]

Is the outdated stereotype of the self-employed as tax dodgers really the justification for the 3% USC surcharge?

That's a pretty depressing thought if true.

 

[Duke of Marmalade]

Is the outdated stereotype of the self-employed as tax dodgers really the justification for the 3% USC surcharge?

That's a pretty depressing thought if true.

I take your point but is it really that outdated?

Stephen’s reference to ‘ways’ is surely an admission that the stereotype is alive and well. The idea that she wouldn’t bother with legitimate ways to reduce her tax bill if it wasn’t for this surcharge is not credible. I take it to mean that the surcharge would be the straw that pushes her into cheating, but maybe Stephen can clarify what he means by ‘ways’.

 

[T McGibney]

I take your point but is it really that outdated?

The specific idea that it's only business people earning more than a hundred grand a year who tax dodge is laughable.

 

[Firefly]

It is the general suspicion that many s/e under declare that underpins the surcharge. Very unfair I know for those who are totally compliant.

I wonder could this surcharge be open to a legal action? Is this not discrimination based on employment type?

Can you imagine the outcry if it was the other way around and the surcharge was charged against PAYE workers and not the S/E ? There would be war!

 

[T McGibney]

I wonder could this surcharge be open to a legal action? Is this not discrimination based on employment type?

Of course it could and of course it is. But nobody's going to mount a Supreme Court case costing hundreds of thousands of euro just to save a few grand in USC.

Can you imagine the outcry if it was the other way around and the surcharge was charged against PAYE workers and not the S/E ? There would be war!

Quite.

 

[Duke of Marmalade]

Of course it could and of course it is. But nobody's going to mount a Supreme Court case costing hundreds of thousands of euro just to save a few grand in USC.

Quite.

I’m sure this debate has raged elsewhere on AAM but I don’t think the injustice is as stark as it appears. A s/e earning over 100k always has the option to incorporate, but then wouldn’t employer’s PRSI kick in?

 

[Duke of Marmalade]

The specific idea that it's only business people earning more than a hundred grand a year who tax dodge is laughable.

McG this is not of course a morality tale. The PAYE worker, given the chance to get a few bob under the table, would be just as inclined as his s/e sister to avail of it but the reality is that the scope to do so is much more limited.