The Finance Bill legislates for the changes to the personal income tax system announced by the Minister in Budget 2025. In summary, the main provisions are:
As per our pre-Budget article on employment taxes we are happy to welcome new guidance on Revenue practice regarding Split Year relief. Where an employee arrives or departs Ireland from 1 January 2025, the claim for split year relief can be made through their year-end tax return and removes the burden on the employee to notify Revenue of their intention to claim the relief in the year of the move.
We welcome this change, however it is disappointing that as currently drafted, the practice will not apply for 2024 and as such it is important that where any individual relocates to or from Ireland in 2024 they will have notify Revenue of their intention to claim the relief before 31 December 2024. We would hope that the Minister considers bringing this in for 2024.
The Small Benefit Exemption threshold has been increased to €1,500 per annum. There has also been an increase in the number of vouchers or benefits that qualify for the relief from 2 to 5. As such an employer can provide up to 5 vouchers each year once the cumulative value does not exceed €1,500. Interestingly the Finance Bill also confirms the exemption will come to an end from 31 December 2029. Whilst it may be that this provision will be “extended” in subsequent finance bills it is not clear why the Minister has sought fit to introduce an expiry date.
Following on from last years’ Budget, the additional relief of €10,000 to be applied to the Original Market Value (OMV) of cars in Category A-D (and all vans) will continue to apply for another year which will reduce the BIK payable. The current reduction of €45,000 in OMV when calculating the BIK for Electric vehicles will continue to apply until 31 December 2025.
From 1 January 2025, Finance Bill 25 provides for an exemption from BIK on expenditure of providing EV charging facilities on business premises on the basis it is available to all employees and directors. This exemption will extend to the provision of charging facilities at an employees residence once the employer retains ownership of the charging facility.
Should you wish to discuss any aspect of Employment & Individual Taxation, please contact our team:
Tanya Dooley - Tax Manager - +353 1 6440100
Return to Finance Bill 2024 Commentary
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