The following table sets out the effective tax rates for self employed tax payers earning €60,000 pa. The effective tax rate is the highest in 10 years…
| Effective rate of tax | Self employed based on €60,000 | ||||
| Single | Married, 1 income | ||||
| No Children | 2 Children | ||||
| 2001 | 35.4% | 27.6% | |||
| 2002 | 34.2% | 27.1% | |||
| 2003 | 34.2% | 27.1% | |||
| 2004 | 34.2% | 27.1% | |||
| 2005 | 33.6% | 26.4% | |||
| 2006 | 32.6% | 25.3% | |||
| 2007 | 31.2% | 23.8% | |||
| 2008 | 30.6% | 22.9% | |||
| 2009 | 31.2% | 23.5% | |||
| 2010 | 34.2% | 26.5% | |||
| 2011 | 36.6% | 29.4% | |||
Self employed single people who have relatively low earnings have been hit hard by the Budget. However high earners have got off lightly with the increased tax take reducing the higher the earnings!
| Gross income | Total change | Change as % | ||||
| pa | of Net income | |||||
| 10,000 | – 480 | -5.3% | ||||
| 15,000 | – 729 | -5.8% | ||||
| 25,000 | – 999 | -5.2% | ||||
| 35,000 | – 220 | -0.9% | ||||
| 45,000 | – 1,155 | -3.8% | ||||
| 55,000 | – 1,355 | -3.9% | ||||
| 75,000 | – 1,755 | -4.0% | ||||
| 100,000 | – 1,506 | -2.7% | ||||
| 125,000 | – 1,256 | -1.9% | ||||
| 150,000 | – 1,006 | -1.3% | ||||
| 175,000 | – 755 | -0.9% | ||||
The following table shows the net change for a single person based on gross earnings as indicated.
Interestingly, a single person earning €35,000 per annum only suffers a change of €4 per week, less than 1% of existing net salary.
| Gross income | Total change | Change as % | ||||
| pa | of Net income | |||||
| 10,000 | – 200 | -2.1% | ||||
| 15,000 | – 399 | -2.8% | ||||
| 25,000 | – 989 | -4.6% | ||||
| 35,000 | – 218 | -0.8% | ||||
| 45,000 | – 1,101 | -3.4% | ||||
| 55,000 | – 1,249 | -3.4% | ||||
| 75,000 | – 1,545 | -3.4% | ||||
| 100,000 | – 1,934 | -3.4% | ||||
| 125,000 | – 2,463 | -3.6% | ||||
| 150,000 | – 3,013 | -3.7% | ||||
| 175,000 | – 3,567 | -3.9% | ||||
Budget 2011 documents (published on 7th of December 2010) are available below. They are also available in a range of formats.
Files are available for download here.
While every household will feel a severe pinch on Tuesday, those at both ends of the earnings spectrum will experience blunt force trauma, according to Susan Lynch, a director of Ernst & Young’s personal tax services division writes in The Sunday Business Post.
Taxpayers are being advised to avail of the four-year window for claiming tax reliefs to make the likely cuts due in Tuesday’s Budget that bit easier to bear, The Sunday Business Post writes.
Taxi drivers, ethnic shops, ebay sellers, market stall holders, fast food outlets and couriers are among those being targeted by the Revenue in a crackdown on the now burgeoning ‘shadow’ economy, according to The Sunday Business Post.
Homeowners should pay a flat-rate property tax of €500 from next year and pensioners ‘on reasonable incomes’ should be taxed, according to Danny McCoy, director of the employers’ lobby group, IBEC.
McCoy told The Sunday Business Post that a direct, transparent once-off property tax would be the best way to minimise damage to economic growth.
“The political spine has never been there to do this before but we are in a very different place now. Let’s face up to this now: the state needs cash,” he said.
McCoy said the current proposed tax of €100 a home, which would increase over time in line with a site evaluation system, would not generate enough revenue. And he also said it was time some pensioners were brought into the tax net.
“The elderly on a lower income should not have to take a hit, but it is ridiculous tat those on reasonable pensions should not have to contribute something – like every other group across society.”
However, he also described the proposal to reduce private pension relief from 41% to 20% over the next four years as “potentially reckless”.
Taoiseach aspirant and minister for culture Mary Hanafin has lobbied her colleague Brian Lenihan to extend tax breaks for investment in film production in Tuesday’s Budget, The Sunday Business Post reports.
If any Machiavellian spin doctor had bad tidings to announce, this would have been the week to get them out there. The media preoccupation with the possible ramifications of the government’s four-year austerity measures and the likely impending bailout left little room for other business stories in the Sunday broadsheets.
A plan to scrap a tax break on patent royalties could have a serious impact on innovation and investment in hi-tech companies, according to The Irish Software Association (ISA) and others in the sector.
The National Recovery Plan was published by the Government yesterday, 24 November 2010. We have set out below the taxation highlights of the Plan. More details can be expected in the Budget on 7 December.
Our friends in Acumen & Trust have isssued the folowing note on the pension implications of the National Recovery Plan.
On 24th November 2010, the Government published the National Recovery Plan, which aims to rectify the country’s monetary position. This signals some potentially radical changes to pension funding and benefits.