Sir, – The editorial "Taxing the self-employed" (October 24th) stated that the divide between PAYE workers and self-assessed workers has "widened further with the Government's decision to make the self-employed pay an 11 per cent rate of universal social charge on earnings over €100,000". To suggest the divide has widened as a result of changes introduced in Budget 2015 is simply not true.
The marginal tax rate for the self-employed earning over €100,000 has not altered with the changes introduced in Budget 2015. In 2014 self-assessed workers earning over €100,000 face a 55 per cent marginal tax rate comprised of 41 per cent income tax, 10 per cent USC and 4 per cent PRSI. Following the introduction of the measures introduced in Budget 2015, a self-assessed worker earning over €100,000 will continue to pay 55 per cent tax; however it will now be comprised of 40 per cent income tax, 11 per cent USC and 4 per cent PRSI.
These changes to rates will result in an increase in net income for the self-employed taxpayers at all income levels.
The factual position is that a single PAYE worker and a single self-assessed worker earning €100,000 will see an increase of €747 in their net income in 2015, as a result of the Budget 2015 changes. – Yours, etc,
BRENDAN LOUGHNANE,
Press Officer,
Department of Finance,
Dublin 2.