I’m as mad as hell and not going to take this any more
The Budget drove us demented... but there’s a way, using Paschal’s tricks, to get some of his tax takeaways back
‘I’M mad as hell and I’m not going to take it any more!’ That was the catchphrase yelled on live TV by newscaster Howard Beale in the classic movie Network. Howard, played by Peter Finch, suddenly cracked after years of reading out ‘bull **** ’ on the news. Well, that’s exactly what I feel like doing after this weeks’ Budget.
I’ve been writing about Budgets for over two decades and I’m getting sick of the charade we go through every year.
This is not about whether we should have a conservative budget or a generous one, or whether I get a tax cut or two. It’s about the spin, baloney and downright lies we get fed every year regardless of whether the budget is tough or a downright bonanza.
Brexit is looming. The economy is overheating. I get it. But just tell it to us straight. Don’t take us for fools as you do year after year.
Paschal, you spent all the spare money in the kitty on public sector pay rises – and then some. So you have to increase our tax – even if it is by stealth – to make up the balance.
Normally you give us pretend tax cuts that are taken back by stealth and inflation. This year, there were none. So the stealth and inflation translate into tax increases.
Last year the Economic and Social Research Institute reckoned we were worse off to the tune of 0.7% after your ‘giveaway’ budget (see table below).
This year that figure is set to jump again. After inflation (1.4%) and tax by stealth, it seems we will be over 1% worse off next year.
I understand that Brexit is a major threat. But it is going to hit families hard – adding over €1,300 a year to shopping bills and costing thousands of jobs.
How is hammering us with more tax that is probably going to be squandered by Government going to help us? It is also within the power of this Government to solve the whole potentially catastrophic Brexit situation by doing a deal with Britain, even if it means compromising on the backstop.
So, altogether now, let’s go to our windows open them up wide and shout: ‘I’m mad as hell and I’m not going to take it any more!’
That might make us feel better – but it won’t make us any better off.
There is a way to use the basic principles of the minister’s tricks to get much of our money back.
Politicos like Paschal Donohoe get away with fooling us every year because the tax and benefits system is so huge and complex we don’t fully understand what he is up to.
But the vast nature of the tax and benefits system can work in your favour too.
The minister would be bunched if everyone collected every benefit and tax rebate they are due.
Taxback.com reckons the average tax rebate they manage to get for their clients is worth €1076.
If that were applied across even half the workforce it would be worth over a billion euros. That would wipe out the smirk on the minister’s face!
And here are some other the key ways to keep your money out of the minister’s clutches after the Budget:
GO ELECTRIC
Electric vehicles (EVs) offer brilliant tax savings. They cost €2,000a-year less to run with lower tax and maintenance bills. The minister didn’t do much extra for EVs – just €3m for infrastructure, including charging points for apartment blocks. But he did extend the really attractive incentives that are there already such as zero Benefit In Kind until 2022 and also VRT reliefs on hybrids to 2020. The selfemployed and businesses can also write off the full cost of an EV in year one, which is a massive boost. If you can’t afford an EV, why not get an electric bike which can be bought for half price with another tax-saving scheme (see A Question of Money, right).
REVISE/WRITE – YOUR WILL
Children can inherit more money from their parents tax-free after the Budget.
So it might be time to revise your
will to maximise what you can pass on or give away without getting clobbered by gift or inheritance tax.
The threshold for applying Capital Acquisitions Tax will go up from €320,000 to €335,000 for gifts or inheritances received on or after October 9.
CLAIM YOUR CREDITS
There are myriad tax credits but don’t assume they automatically apply. ‘It’s a common misconception that Revenue will automatically apply tax credits,’ says Taxback.com.
‘If you’re owed tax back for medical procedures, tuition fees etc, you’ll have to sort it out yourself. Also, the basic personal tax credit and PAYE tax credits should be automatically applied but in most cases aren’t.’
A biggie that many people miss out on is the home-carer credit which is for stay-at-home spouses of employed workers. This went up again in the Budget by €100 to €1,600 and is worth exactly that into your hand, so it’s well worth claiming. Yet tens of thousands of people who are due it, don’t seem to claim.
PENSION PROOF SAVINGS
The deadline for paying annual tax is looming for the selfemployed at the end of this month. The minister didn’t do anything on pensions, but at least he left the only tax break at the top rate of tax intact. Saving money into your pension will stop Paschal getting his hands on it. PAYE workers can also save more into their pensions through Additional Voluntary Contributions.
MEDICAL EXPENSES RELIEF
Medical expenses relief is one of the few ways for PAYE workers to save tax – so make sure to make the most of it. Keep your receipts for going to the doctor – a photo will do – and claim at the end of the year. You can backdate claims for four years – as you can with most reliefs.