Middle-income earners to benefit from new tax bands in next budget

Middle income earners will benefit from revised tax bands in the next budget, the Taoiseach has said.

Budget 2019 will see the income threshold at which taxpayers pay the highest rate of tax raised, Leo Varadkar promised. Last year's budget saw this cut-off point for the 40 per cent rate of tax move to €34,550, an increase of €750. "There will be a tax package, perhaps similar to last year, relatively modest,” he told The Irish Examiner. "But a real focus is on the standard cut-off point, the point at which so many people start paying the higher rate of income tax. People on very modest incomes pay the highest rate of income tax. "The average person working full time in Ireland, if you exclude students and people working part-time, earns around €40,000 to €45,000 a year. "Those people pay income tax at the very highest rate. You get an increase, an increment, almost half is gone on tax and USC.” However, there is expected to be more of a focus on investment in services and infrastructure in the budget than on decreasing taxes. Mr Varadkar said he wants to boost social welfare payments in line with inflation in the upcoming budget as well. There could also be good news for the self-employed as the government is looking at introducing a form of jobseeker's allowance for people who work for themselves.