TAX BACK: WHAT’S THE CRAIC?

Claiming tax which you have overpaid is a common concern for most workers, yet it is one that is often overlooked. Each of us either know someone or is the person who is most likely to say “I think I have overpaid tax, I will definitely look into it” only to entirely forget and get on with daily life.

Although new tax reductions were introduced in the most recent budget, which may have had a slight effect on our wallets many workers are still feeling the tax pinch. To hopefully alleviate some of this stress, and replace some of the money into your own pocket where it belongs, we have collated some of the most common ways that you may have overpaid tax. Reports suggest that a great many people are unaware of having paid too much tax, and are failing to reclaim it. Many people are also unaware that you can claim for as far back as four years, so whilst you may be on track with tax payments now, it is possible that you can claim for previous years. I’m sure none of us would argue with having a few extra pennies in our wallets for the weekend.

Rental Tax Credit

This credit only applies to those who have been in rental accommodation on December 7th 2010, and is due to be phased out entirely. Before then however, you may be able to claim some tax back for your rental status.

Health Insurance

Those who have private health insurance, you may be entitled to claim some tax back. This will be dependent on the cost of your policy.

Marriage Tax

The common joke about tying the knot for the tax breaks is still doing the rounds, and is based somewhat in truth. If you have been married in the past four years and not notified Revenue, you may have overpaid tax and be eligible for a rebate. This is typically based on what you both earn and your income bands, and your joint assessment situation. Isn’t that what true love is?

DIRT

Whilst first time buying has become a minefield in recent years, the one small saving grace is the ability to claim back DIRT on savings for your deposit. Definitely something for first time buyers to bear in mind during the stresses of purchasing.

Travel Costs

Travelling to and from work every day can be a significant drain on your finances when paying full price for public transport. Employees can purchase a TaxSaver commuter ticket through their employers which allow tax free commuter tickets as part of a salary package.

Home Carer Tax Credit

Many people who have taken time out to care for children or elderly relatives are unaware that a tax credit can be awarded to the working spouse to ease financial worries. In Budget 2016, it was also announced that the cut off rate for the earnings of the non-working spouse would be raised from €5,080 to €7,200, meaning that this can apply to many more people than previously. The credit itself has also been increased this year from €810 to €1,000.

USC

Despite a reduction of the USC in the most recent budget, the USC remains a tax which is an irritation for many workers. There are a couple of ways in which you may have been overpaying this tax and be due a rebate, the most obvious one being in relation to medical cards. If you have a full medical card, you should notify Revenue of your change of circumstances as you may have overpaid USC. Also, if your income fell below the threshold at any point, Revenue should be notified.

Expenses

Many workers remain unaware that they may be entitled to claim tax back on a number of expenses aside from their travel costs. These costs can range from uniforms to tools for trades such as engineers and electricians. For teachers, an annual allowance of €518 is allotted for expenses incurred in terms of teaching supplies, and this applies to many other professions. It is advisable to check the Revenue website to see if you may be entitled to claim back on some of your own working expenses.

These are just a few ways that you may have inadvertently overpaid taxes, and may be able to claim a refund. We would recommend investigating your tax payments in full for the previous four years in order to ascertain if you are due a refund. Should you require any assistance with your own or your businesses finances please don’t hesitate to contact us here at DCA Accountants.

CREDIT RISK MANAGEMENT/INSURANCE

Credit Risk immediately sounds like a term which should strike fear into business owners everywhere. Nobody wants to hear the word risk when associated with your business, but it needn’t be that way and today we are going to speak to you about managing your credit risk.

 

Credit risk can be simply defined as the potential that a borrower may fail to meet financial obligations on previously agreed terms. The main goal of the Credit risk management systems we will be speaking about today is too secure overall credit risk parameters and ensure that neither borrower nor lender suffer as a result of these risks. Managing your Credit Risk can have great benefits for your business including increasing cash flow, increasing credibility, better business development, and more secure trading options to name but a few. Having this backing may also give you peace of mind in terms of the security and longevity of your company.

 

Following the financial crisis, borrowing and lending became a financial minefield, and whilst things have since eased up and more options have recently become available for both parties, the need to be vigilant remains. 25% of all bankruptcies are caused by unpaid invoices, so you may be currently taking more risks than you were aware of. The risks associated with borrowing and lending have not eased as much as one might expect in recent years, and both parties must be aware of the dangers associated.

 

Some Credit Risk Management companies offer to advise and protect clients in order to allow safe trading, effectively insuring a company’s finances ahead of trading. The first step in Credit Risk Management is to gain a full and comprehensive picture of the company’s finances and position as well as having a solid idea of the company’s ability to lend to customers. Having this comprehensive picture then allows the creation of an appropriate action plan for managing your credit risk, having a simple plan in place will then pave the way for more sophisticated credit management solutions in your company’s future.

 

Credit insurance is one fairly simple way to manage your credit risk which may assist your company in growing profitably. Cash flow is the most important and also the most vulnerable aspect of business and credit insurance could give your company peace of mind against any bad debts. Credit insurance insures your company against the potential of your customer’s failing to pay their debts within your agreed parameters. This in turn ensures that your company finances and risk scores do not suffer when it comes to your own future borrowing. Non-payments are one of the top ways in which your business can be weakened, and Credit Insurance can be the ideal way to navigate this issue. In this way, you are assured that your company will reach its anticipated targets even if there have been some defaults.

 

If you find yourself in need of advice, support, or guidance in how to go about credit risk management in your business please don’t hesitate to contact us here at DCA Accountants where we are always happy to help.

DEPOSIT RATES: HOW LOW CAN THEY GO?

In recent months, it has been reported that Irish retail rates have slumped whilst the ECB has kept its refinancing rate at 0.05% since 2014. It has been suggested that the stasis of interest rates may not prevent deposit rates from continuing to slide. Recently, Irish deposit rates have taken a steeper turn than those in Mainland Europe.

The Central Bank’s figures show that Irish savers earned an average rate of 1.83% on deposits since September 2014, this rate then dropped steeply again to 0.98% by November 2015. Despite the ECB remaining steady in its rates, the only distinguishable trend for Irish rates seems to be a downwards trend, with retail deposit rates already steadily inching towards zero.

The ECB was the first major bank to edge towards zero in 2014, and many have since followed suit. This has not been a trend that has been specific to retail rates however, as we have also seen a steep decline in corporate rates, with recent reports suggesting that some banks are now offering negative interest rates to their corporate customers.

What are negative interest rates, and what can they mean for you? In this scenario the bank does not pay a return to keep its money for you, but instead charges you as the client for doing so. As a result, you will then be effectively paying the bank in order to keep your money there. This can have both positive and negative consequences.

Danish banks were the first to implement this idea of negative interest rates, and are now passing this option on to customers. This is a fairly new but commonplace practise in many Euro Zone banking systems with Sweden also recently adopting the practice. Chief economist for Denmark with lender Handelsbanken, Jes Asmussen has been quoted as saying:
“I don’t think we’ve seen the last of this trend. When I trained as an economist, negative rates weren’t in the textbooks, but that’s the world we live in now.”

Certainly, many Euro Zone banks are now offering their customers negative rates, it remains to be seen however if Ireland will follow suit in this practise, but plummeting rates would indicate a strong possibility.

MORTGAGE WOES KEEP BUYERS ON THEIR TOES.

Mortgage rules have been a point of contention in Ireland for some time now and whether house prices fall or rise, it has become increasingly difficult for those hoping to gain footing on the first step of the housing ladder. Last year, mortgage rules were changed to mean that only 3.5% of income can be borrows, and there must be a 10% deposit on all mortgages up to €220,000, and a further 20% on any cost above this figure.

 

At the time of this change it was suggested that these rules would be in place for a period of a year and then re-examined. As they were put in place in February last year, all eyes will be on these rules to see if there is any change which might allow for easier purchasing. DNG have suggested that they would like to see the borrowing limit raised to 4% and the 10% deposit rule extended to €300,000 as they have seen over the past year that many people are becoming trapped by these rules and are unable to buy due to higher house prices and stricter rules.

 

It has been reported this week that we may see an even bigger shake up in the mortgage industry. An Australian lender, Pepper is reportedly set to offer new incredibly competitive mortgage rates which will target first-time buyers in particular. This arrival of a new lender is expected to push current Irish lenders into offering new lower rates in order to respond to competition and demand.

 

Already since the announcement we have seen Bank of Ireland offer a new bonus. This bonus would see them add 10% to first time buyers onto their existing deposit savings. Additionally, Bank of Ireland were already offering 2% back of every new mortgage.

 

Pepper is said to be set to offer rates as low as 3.55% for both first time buyers and those looking to switch lenders. Pepper Ireland boss Paul Doddrell has suggested that Pepper will also be first in line with offers for those who have found themselves refused by other banks, including those who are self-employed. It is suggested that Pepper will also be able to lend to those who found themselves in arrears during the financial crisis, but have now found their way back to meeting payments.

 

Whilst these new offers may not be a complete end to Irish mortgage woes as these offers will only be available through brokers, the suggestion of another adjustment of the overly tight mortgage rules will be a welcome one for many first time buyers and prospective first time buyers. It is hoped that we will see a general reduction in rates, with the onset of further competition in the Irish mortgage market. If you require assistance with your own or your company’s finances whilst hoping to gain a mortgage, please don’t hesitate to contact us here at DCA accountantswhere we are always happy to help.

GOODBYE VISITING RELATIONS, HELLO INDUSTRIAL RELATIONS

As we have now hopefully all shaken off the last of the holiday tiredness and the children are all back to school it is now officially time to get back to work and build on the successes of 2015. While we don’t condone this type of behaviour, none of us can be held responsible for what happens to the last couple of biscuit and chocolate boxes laying around all of our offices and homes this month. Whilst our diets may take a hit, our ability to inform and assist will not so we are back this week with information on a new Bill which has been introduced.

 

The Industrial Relations (Amendment) Act 2015 was signed into effect in July of 2015 and actively commenced in August 2015. The amendment of this Act will have several consequences on industrial relations, all of which it is important to be aware of in order for your business to be properly equipped to deal with the main changes in this Act. Here we have collated some of the main changes which can be expected and which might have an effect on your business. Two of the most obvious changes here will be to non-unionised companies.

 

Registration of Employment Agreements (REA’s).

This Act reintroduces a structure for the above which allows the Labour Court to review and introduce new rates of pay. This may affect your own business as changes to the current minimum wage of €9.15 can be expected.

 

Trade Disputes.

It is thought that this Act will result in a great deal more trade disputes being referred to the Labour Court which may result in employment terms being laid out by a third party. Prior to this Act, the Labour Court was unable to conduct investigations unless there is a larger number of employees involved in the dispute. There have however been assurances that the Act will not result in Collective Bargaining issues.

 

There may also be additional changes to issues such as sick pay, pensions, holiday pay etc. which will of course all be dependent on each specific company. We would advise that all business owners read over this new amendment and its coming recommendations in full in order to be best informed.

 

Full details of the changes and recommendations will be published in the coming weeks but until then it is always wise to have information on any of these changes so that your business can be better prepared for any issues which might arise. Should your company already recognise a union, there are unlikely to be many additional issues arising from this amendment.

 

Should you have any concerns or queries, as always please don’t hesitate to contact us here at DCA Accountants.

2016 – A NEW YEAR OF BUSINESS

Hello again and a very Happy New Year to all of you from us here at DCA Accountants. The foggy haze of a holiday season well spent may not have fully lifted just yet and this month may see all of our wallets a little lighter. To combat this, we have compiled a list of some handy tips to increase cash flow for you and your business and start 2016 off on the right foot.

Budget Budget Budget

No, we don’t mean another governmental offering, lay down the pitchforks, rather a budget for both your business and your own income. It may seem basic to suggest setting out a budget for your business as there has probably been a general one in place for years. However, when entering a new year we would advise setting out an immediate new budget to ensure that you have a clear idea for your finances and where you want them and your business in general to be for the year ahead. On a more personal level, it is advisable to map out exactly what your monthly income is and make a note of the absolutely essential outgoings. From there you will be able to add on the less crucial expenditures and have an idea of how much it will be possible to save each month.

Pay up

The easiest way to keep track of both personal and business finances is to ensure that bills are paid as soon as possible, rather than waiting until the last minute deadline. This will prevent you from overspending as the cash will already have been spent, rather than existing in a limbo of “to be spent” where the temptation to dip in can be strong. In business, you should always set clear and attainable payment terms with all suppliers to avoid confusion.

Be Flexible

Yoga might have played a part in your New Year’s resolutions so keep up the good work, but here we do not mean flexible in the physical sense. In both personal and business finances there will always be unforeseen expenses that creep up and threaten to derail your budgeting. The key when these issues arise is to be flexible and accept that this expense must be paid, but it doesn’t need to be the end of your savings. As much as it is tempting to derail a healthy eating plan after a day of indulgence, it is incredibly easy to allow your finances to become confused after unexpected expenses. Instead of allowing this to happen, a clear budget should allow you to figure out a way to get your savings and finances back on track.

Keep in Touch

In business, it is advisable to keep regular contact with your accountant and bank so that you are at all times aware and knowledgeable about the cash flow of your business. This contact will also assist you in identifying areas of concern early on to help avoid any issues.

We hope that these simple tips will assist you going into the New Year and that 2016 will be a successful year for you and your business. As always, should you have any concerns or queries please contact us at DCA

MERRY CHRISTMAS & A HAPPY NEW YEAR FROM DCA

 

Here at DCA we would like to wish all our clients a very Merry Christmas, and wish you and your business a prosperous 2016!

BANKRUPT NO MORE

Recently, we discussed some proposed changes to bankruptcy terms in Ireland. We can now report that these legislative changes have been largely accepted by the government. These changes have been hailed as being one of the most positive changes to Irish bankruptcy law for the many people currently suffering from debt issues.

 

It has been reported recently that although these changes will be widely accepted, some minor changes may need to be made. As we previously stated, the main proposed change would be that the discharge term for bankruptcy is to be reduced from three years to one year. This would be a major change in Irish bankruptcy procedures and would allow for those individuals who have been made bankrupt to return to business far sooner than was previously possible.

 

An amendment has been suggested on the proposed document. It was originally stated that those who have been bankrupt for more than one year prior to legislation being passed would see their bankruptcy discharged after 3 months. It is suggested that the government may now amend this to six months. This will still allow for many people to have their bankruptcy period greatly shortened, and it is hoped we will then see many entrepreneurs surge back into the market.

 

Another major change to Irish bankruptcy proceedings is in relation to the seizure of family homes following bankruptcy. TD Willie Penrose who is the main driving force behind these changes has proposed in his bill that these properties must be sold within three years, or be returned.

 

There have been some whisperings of these changes making bankruptcy appear a more attractive option. IMHO Chief Executive David Hall has rubbished these claims stating that:

“Going bankrupt is a daunting process for anyone – subjecting yourself to having the knives and forks in your house counted by a third party to establish what asset value you have in your house.”

 

Indeed, the very idea of the word bankruptcy is an incredibly daunting notion for anyone to face. It is hoped, however that these new changes, whilst bringing Irish law into line with Northern Ireland and the UK, will also make the process somewhat less devastating. This perhaps will then assist in Irish recovery as we see some of our entrepreneurs and hard-working business owners who have fallen on hard times make a swifter return to business.

 

Once again, we hope that this clears up any confusion about the ongoing changes within bankruptcy law and procedures in Ireland. If you yourself are experiencing difficulty and would like to know more about the process, please don’t hesitate to give us a call here at DCA Accountants.

TIS THE SEASON TO REMAIN PROFESSIONAL

With the Christmas party season just around the corner, we here at DCA Accountants are always looking out for the best interests of our clients and readers. As such, we have decided to talk today about the darker side of the office Christmas party which could place a dark cloud over the season for you or your staff. The Christmas party season is often rife with reports of bullying of all kinds and harassment. Not quite the ideal way to round off a busy working year.

 

The office Christmas Party is a great way to thank your employees for a year of hard work and dedication. It can also be a good way to get to know your co-workers outside of a strict office environment. However, from a managerial standpoint it can be somewhat of a mine-field, with a UK study stating that one in ten employees knows someone who has been disciplined or dismissed following the staff Christmas party. The top two culprits here are alcohol-fuelled fights and sexual harassment issues. These issues are not widely considered when choosing the event, but one that is important to bear in mind. We suggest some ways to avoid these awkward and unnecessary stumbling blocks and ensure that both you and all staff have a wonderful trouble-free evening.

 

The standard office Christmas party will usually occur outside of the work premises. Despite this fact, it is vital to remember that the responsibility still remains with the employer to ensure the protection of all employees. If cases of harassment are brought up, you as the employer are liable, despite the party location. The party environment may be festive, but legally the event is just an extension of the office.

 

A good way to ensure that all staff know that they must still behave appropriately with one another during the party is to circulate a memo which pinpoints the company’s/office’s no-tolerance approach to issues such as bullying and harassment. This notice should also include the company grievance procedures should any staff have issues. Management should be advised not to discuss any business matters such as salaries etc. at the event. This will ensure that no promises are made under the influence of alcohol which cannot be kept when the haze passes.

 

Something else which is not widely considered is that the party should be optional for all staff and not mandatory. This allows for people with other beliefs or responsibilities to politely decline without feeling awkward. We would also advise arranging specific finishing times for your event and perhaps arranging transport to avoid further dangers for you and your staff.

 

With employers and employees under increasing pressure to hold onto their positions, these easy pitfalls at the staff Christmas party are easily avoided. The most important thing to bear in mind is that the boundaries of acceptable behaviour must be set out beforehand in order to avoid any unnecessary stress or awkwardness. We here at DCA Accountants hope that you and all your staff/co-workers have an enjoyable Christmas party and festive season.

WHO YOU GONNA CALL? …BANKRUPTCY BUSTERS!

Bankruptcy is not a word that fills anyone with a sense of glee, but sometimes it is the only option for both you and your business during hard times. As is often said in business, there certainly comes a time when it is best to cut your losses and move on. For many, this involves the necessity of filing for bankruptcy until such a time as your finances are once again in order. In the past, becoming bankrupt has often been a very stressful and arduous time. Fortunately, new reforms are set to be introduced which could change this process and make it a lot easier and about as pain free as it is possible for this task to be.

 

Taoiseach Enda Kenny has said that there will be reforms introduced which will reduce the period that an individual is bankrupt for from three years to one year. These reforms would require an amendment in the Personal Insolvency Act of 2015, a change which the Taoiseach is said to be strongly in favour of.

 

This amendment would bring Irish insolvency and bankruptcy procedures into line with those currently in practise in the UK and Northern Ireland. TD Willie Penrose has been a major driving force behind this proposed change stating that in his believe it is better that these people be allowed to return to making economic contributions after one year rather than being outside of the business world for three. Penrose states that these people could be entrepreneurs ready to re-enter the business world, but they cannot.

 

CEO of the Irish Mortgage Holders Organisation, David Hall has largely welcomed these proposed changes stating that:

“This development will be of huge benefit to those debtors who are seeking a fresh start and want to rid themselves of debt.”

 

Certainly, these changes will somewhat change the face of business in Ireland and allow more opportunity for change and the ability to move on at a faster pace from a period of business which may have been unsustainable for a great many reasons. As we have seen in the UK and Northern Ireland models of dealing with bankruptcy, this has not caused a great many extra financial issues and should be a good fit for the Irish system.

 

Whilst these new rules will make the process of applying for bankruptcy in Ireland somewhat less painful, it is advisable to seek professional assistance when doing so. Should you require any professional advice or guidance in a matter such as this please do not hesitate to contact us at DCA Accountants where we will be happy to assist and to guide you in the best direction for you and the brighter future of your business.