Good day for tracker customers and minimum wage staff

SO who does best from the tax breaks that are on offer in Budget 2024?

Those on tracker mortgages can gain the most, getting up to a chunky €1,250 in tax relief on mortgage interest. This is designed to ease the pain of those on non-fixed mortgages and applies at 20% on any increase in interest paid between 2022 and 2023.

Tracker mortgages were worst hit by the shock series of ten ECB hikes. But those on fixed rates are ruled out from the new measure, unless they are fixed at a higher rate than they paid previously during 2023. They may feel miffed, as tracker-holders have paid hardly any interest for over a decade.

What else is in store? The big winners of Budget 2024 are those on the minimum wage, according to the Government’s official Budget tables (some of which are reproduced below). Someone on €15,000 would get an extra €1,858 in wages due to this change alone, while a worker on €20,000 could expect an extra €2,478. We excluded these samples from our tables as the Government was taking credit for wage increases that employers have to pay. We also excluded those earning over €100,000 a year as their tax benefits are capped.

A married couple with one income would see a reduction in tax of €992 on any income higher than €75,000 – par for the course, with most people on incomes above this. Most people on middle incomes are gaining €400-€500 a year. But the impact of inflation and wage increases are ignored in these calculations. The tax tables below are accurate but don’t take into account pay increases that mean we pay more tax if the whole system isn’t increased in line with inflation, as it is in other countries.

Overall, the package disappointed tax experts. ‘The Government’s decision to increase the entry point for the top rate of income tax to €42,000 is welcome – but it doesn’t go far enough,’ said Marian Ryan from Taxback.com.