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Budget 2024: Introduction of a new mortgage interest relief, cut to USC are welcome. A need for more targeted Measures to Support Businesses

10 October 2023. Daryl Hanberry, Tax Partner and Head of Tax & Legal, Deloitte Ireland, commented: “today’s Budget is broadly targeted at individuals and in particular the squeezed-middle with most of the tax package aimed at increasing income tax bands credits and reducing rates of USC. The introduction of the National Investment funds is prudent and well timed. We would have hoped for more material reform to the SARP and KEEP schemes. With the impending Pillar II reforms the introduction of the increased rate of R&D relief is to welcomed. ”

“For nearly three years now there has been no tax relief available on mortgage payments. The re-introduction of relief by way of a new targeted temporary tax relief for mortgage interest payments in Budget 2024 is a welcome cost of living measure.”

Commenting on the personal tax system and reduction in USC, Daryl Hanberry, continued: “The reduction in the middle USC rate from 4.5% to 4% and the increase in the threshold to €25,760 per year for the 2% rate that will benefit many taxpayers, particularly the squeezed middle. A competitive and effective tax policy is a vital part of Ireland’s position in retaining and attracting talent in the world which is highly digitalised and mobile. This is critical both in the context of inward investment to Ireland and supporting indigenous business and entrepreneurs.”

On the Special Assignee Relief Programme (SARP) Commenting, Hanberry said: “The Special Assignee Relief Programme (SARP) is an effective and competitive opportunity to attract top talent to Ireland and is vital to Ireland’s position in retaining and attracting Foreign Direct Investment. Despite the potential of this tax policy, the relief is insufficient and too restrictive. While there was no reference to SARP made by the Minister today, we hope to see further detail in the finance bill when published.

Supporting smaller businesses is also important. The Key Employee Engagement Programme (KEEP) aims to help smaller firms who cannot compete with larger firms in cash remuneration terms to attract and retain talent in a challenging labour market, however, it is not achieving its objectives. We also welcome the EU State Aid approval of the changes introduced to the programme which were first announced in last year's budget. We will continue to engage with Government on how this scheme can be enhanced to be more effective.”