When Budget2024 was published back in October 2023, the forecast was for €24.5 billion of Corporation Tax to be collected in 2024. The recent end-year Exchequer Returns show that receipts came in at €28.1 billion, giving an overperformance of €3.6 billion or 14.7 per cent.
Note that everything here excludes any receipts linked to the CJEU ruling in the Apple State-Aid case. The overperformance relative to the Budget2024 forecasts was greater than the total amount collected in 2011. Yet, still, the final outturn was somewhat disappointing.
This was because as 2024 progressed, a strong performance early in the year gave rise to expectations that this would continue into the second half of the year. This was particularly true of June which serves as a useful bellwether to what might be collected later in the year and June 2024 was 38 per cent higher than the same month in 2023.
By the time of Budget 2025 last October, the expectation was that total CT for the 2024 would be €29.5 billion. This was not an unreasonable expectation given what was known at the time. However, the upward trajectory of the 12-month sum as shown above, which was very strong in the first half of 2024, stalled not long after the Budget.
And while the key month of November was strong, it was not by as much as the June figure might have indicated. On a monthly basis June 2024 was 38 per cent higher than the June of the previous year. Given the links between payments a similar increase might have been expected in November, but November 2024 was “just” 15 per cent higher than the same month of the previous year.
However, as we recently pointed to, even with this lower growth in November, a key reason for failing to reach the most recent 2024 CT forecast was because of a weak October.
The monthly October receipts are a pin-up to highlight the concentration and volatility of Ireland’s CT revenues, with large, and seemingly unpredictable, swings from year-to-year. And it is possible, even likely, that a single firm may be responsible for the volatility shown. If October 2024 had matched 2023, never mind the peak of 2022, then total CT receipts for 2024 year would have fairly close to the most recent Budget forecast.
As it turned out, both November and December set records for monthly receipts, with December being particularly strong. Here are the individual monthly receipts for November and December for the past 15 years.
There is really no reason to combine November and December, other than to show that the receipts across the two months reached almost €10 billion in 2024. We should not become immune to the scale of these numbers.
The strong December receipts may be a pointer to strong receipts next May – these are months six and eleven for companies with a June year-end. The relationship isn’t as strong as that for the June and November receipts but still a record in December 2024 points to next May being strong as well.
To conclude here is the cumulative annual chart for recent years. It is now up to 11 pretty much non-overlapping lines. There are so many lines, value labels for all of them can’t be easily accommodated so only those for even-numbered years are shown.
And there is nothing to suggest that 2025 will break the pattern and give a line that drops below the previous year.
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