Prsi on savings could rise

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mcriot29

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Looks like prsi will be 6 percent soon,
If so and dirt rises in budget.
The tax on savings could hit 40percent .
I have a feeling goverment will raise dirt and CGT etc to 35 percent in budget if prsi goes up to 5 or 6 that will mean 40%
 
Deposit interest tax via DIRT is obviously currently 33%. Deposit interest tax via DIRT and PRSI (typically 4%) will have a typical effective rate of 37% from 1 January 2014.

Hence, deposit interest tax effectively goes up by 4% on 1 January 2014 already. Difficult to see how the government can push it much further in one go. With lower deposit rates, those, who are dependent on deposit interest for living are taking a huge hit lately.

There is still no news on how PRSI will be collected from interest on deposit accounts from 1 January 2014.
 
The simplest way would be to increase DIRT to 37% and leave the Tax rate at 33%.
 
The Social Insurance Fund (SIF) receives all proceeds from PRSI.

PRSI revenue is segregated by the government from other taxation revenue.
 
does extra rsi mean that you get an extra stamp per year. otherwise it is just another way of increasing tax all be it with the people who have money.
 
An extra stamp? Huh?

Increasing PRSI, which is an increase in tax obviously, increases to money to help pay for our unsustainable state pension obligations.
 
I totally agree.

but imagine a scenario

you worked 39 weeks and paid 39 weeks prsi in the last year but you need 40 to claim social welfare. But PRSI was taken from your savings when interest was accrued. can this be treated as week 40 or as is likely it is merely an increase in the tax.

the same can apply for OAP contributions

I am not great at fleshing out what I am trying to say so if anyone can follow what I am trying to say feel free to put a more logical flow to it.
 
Probably the self-employed will get the extra wallop. They are already paying 4% PRSI on deposit interest
 
CiaranT said:
An extra stamp? Huh?
Click to expand...

Old codgers like me remember a time when PRSI contributions were popularly referred to as "stamps". It dates back to a time, pre-computers, when people's Social Insurance contributions were recorded by means of stamps in a book. :)
 
I know I'm cutting my nose off to spite my face but I'm so sick of savers getting clobbered every fecking year that I might put all my dosh into current accounts where it earns nothing and there the tax man gets jack ****!.I'll just spend it until there's nothing left,Call me stupid and I would probably call myself the same,but I am sick to death with it all!

40% TAX ON DEPOSIT INTEREST WILL BE A STEP TOO FAR FOR ME!
 
paulgreen said:
I know I'm cutting my nose off to spite my face but I'm so sick of savers getting clobbered every fecking year that I might put all my dosh into current accounts where it earns nothing and there the tax man gets jack ****!.I'll just spend it until there's nothing left,Call me stupid and I would probably call myself the same,but I am sick to death with it all!

40% TAX ON DEPOSIT INTEREST WILL BE A STEP TOO FAR FOR ME!
Click to expand...

I have noticed that the balance in my current account is creeping up. Any current account fees are "nil" as a result. Maybe purchase a few Prize Bonds, although they recently slashed the prize money.
 
Totally agree with Paul Green and yes ' returns ' are small and unpredictable with prize bonds but I am avoiding paying over any of my returns to Government and that in a perverse way makes me happy..;-), I also don't have to do the admin of gathering up interest certs to put interest earned on my annual tax returns...
 
The DIRT/PRSI on Savings interest is an extremely soft target for the government. There are a number of possible objectives - obviously, increasing the tax take; people moving their savings to (relatively) tax free state savings; people taking out their money to spend; finally, not much sympathy from non-savers & easy to play in the press (we're hitting the "better off"). Therefore I'd expect it not to stabilize or reduce any time soon
 
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