With Budget 2026 on the horizon and several tax changes already in effect, 2025 is shaping up to be a pivotal year for Irish businesses. From PAYE updates to VAT shifts and the phasing out of temporary reliefs, there’s a lot to track. As a bookkeeper, your role in keeping clients compliant—and proactive—has never been more important.

1. Key Income Tax Changes in 2025

  • Standard Rate Band increased to €42,000 (single earners)

  • Personal Tax Credit, PAYE Credit, and Earned Income Credit all increased by €100 to €1,875

  • USC Thresholds adjusted, keeping low and middle-income earners out of higher bands

What bookkeepers should do:

  • Review employee payroll settings to reflect USC and credit changes

  • Ensure tax bands are updated in payroll software (e.g., Big Red Cloud Payroll)

  • Include updated net pay comparisons in monthly reports

2. Temporary Business Support Measures Being Rolled Back

  • The Temporary Business Energy Support Scheme (TBESS) officially ended in May 2025

  • Covid-related tax warehousing is entering final repayment phases this year

Your action points:

  • Help clients map out remaining liabilities and repayment timelines

  • Forecast tax cashflows to avoid sudden pressure

  • Support applications for phased payment arrangements (PPA) with Revenue where needed

3. VAT Updates and Sector-Specific Reliefs

  • VAT registration thresholds:

    • €40,000 for services

    • €80,000 for goods – still under review, with potential Budget 2026 adjustment

  • Zero VAT on digital books and solar panels remains in effect

  • Hospitality 9% VAT rate not extended; reverted to 13.5%

As a bookkeeper:

  • Monitor client turnover carefully to avoid accidental registration triggers

  • Review VAT codes on invoices and software to reflect updated rates

  • Use sector-specific VAT analysis to identify reclaim opportunities (e.g. green energy investments, food/hospitality)

4. Pensions Auto-Enrolment—Prepare Now

  • Launching Q1 2026, employers will auto-enrol eligible employees into a state-backed pension

  • Contributions from employee, employer, and state

  • Applies to most workers aged 23–60 earning €20,000+

What to do in 2025:

  • Inform clients now—especially micro-employers and sole traders with staff

  • Help test payroll readiness (many will need software updates)

  • Provide cost forecasts (employer contributions will rise over time)

5. New Compliance Risks: eInvoicing & iXBRL Phaseout

  • Revenue has confirmed iXBRL will be phased out for smaller companies from 2026, replaced with real-time reporting and digital filing

  • eInvoicing mandates for public sector suppliers may expand to SMEs in 2026+

 

Bookkeeper prep list:

  • Ensure bookkeeping software supports structured digital formats

  • Train clients on compliant invoicing workflows

  • Begin advising on a 12–18 month transition roadmap

6. Capital Gains and Entrepreneur Reliefs—Still Underused

  • Entrepreneur Relief: 10% CGT rate on disposal of qualifying business assets (lifetime limit €1m)

  • Retirement Relief: CGT exemption on certain disposals over age 55

Many small business owners miss these reliefs due to poor planning or lack of awareness

How you help:

  • Flag potential qualifying disposals (e.g. business sale, asset transfer)

  • Collaborate with accountants or tax advisors on early-stage planning

  • Encourage clients nearing retirement to review ownership structures