What does it mean for you? Budget 2012

Overview

The measures announced in the Budget by the Minister for Finance had been signalled well in advance, and there were few surprises.

The significant revenue generating measures are focused on the indirect tax side, mainly VAT and also Capital taxes, although the estimated tax take from the latter included in the documentation appears optimistic at a time when many taxpayers are nursing heavy losses.

Business will welcome the reinforced commitment to the 12.5pc corporation tax rate, albeit with a sense of déjà vu, and the SME sector in particular will welcome the enhancement to the R&D tax credit regime, while the FDI community will welcome the enhancement of the Special Assignee Relief Programme (SARP). The fly in the ointment for business will be the abolition of employer PRSI relief on employee pension contributions, but overall a pro-business Budget.

Individuals will be glad that income rates, bands and credits have remained unchanged, and there is some good news for the lower paid, although the quid pro quo of a higher VAT rate will hit the pocket. The Budget speech did not contain the anticipated broadening of the PRSI base, but did signal that this was on the cards for 2013.