Posts

The Supernanny Tax

Recently, the Revenue Commissioners have collected approximately €61million in taxes, penalties and interest during their ongoing investigation of over 800 medical consultants. It is believed that there was a significant underpayment of taxes by 276 consultants who had incorporated their private medical practices and other companies. These investigations are currently ongoing and to date, 36 consultants have been published on the Revenue’s list of tax defaulters. The findings include so-called “future uplift” or the estimation of future taxes collected.

Chairman of the Revenue, Niall Cody has been recently quoted as saying of the investigation:

“These are high-wealth individuals. These are people with significant incomes and there has been significant underpayment of taxes.”

This investigation has been underway since 2010, when Revenue suspected that a wrongful tax planning strategy was being marketed towards medical consultants. The incorporation of medical practices can be a legal form of tax avoidance, however many of the practices registered have been found to have no commercial reality, positioning these particular practices in the realm of illegal tax avoidance.

The chairman was also quoted as saying that these individuals had seemingly forgotten the “legitimate boundaries” in relation to tax matters and had wrongfully claimed expenses that were either non-existent or not relevant to the business they were claimed against. Nanny costs and private home expenses were among the expenses wrongfully claimed in some cases. Other issues identified are wages paid to underage family members. Mr Cody explained that in one case expenses were claimed for the services of a child working on a website “because the child was proficient in IT and the consultant wasn’t.”

825 cases have been opened in this investigation, with 552 cases now closed. In all cases closed to date it has been found that the consultants were not in fact acting in goodwill and were evading taxes wilfully and under full knowledge.

Wages were paid to underage family members by some consultants. Mr Cody described one case in which the expenses were claimed for the services of a child for work on a website, “because the child was proficient in IT and the consultant wasn’t.”

The Irish Hospital Consultants Association and tax advisers have asked Revenue to publish guidance on goodwill for medical practices.

Mr Cody was also quoted as explaining that if it seems too good to be true it is probably unethical which is a good rule for your tax matters. If you require any further guidance or advice on your own tax or financial matters, please don’t hesitate to get in touch with us.

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE UP

In recent years life and business have been taking a turn for the seemingly more convenient with it becoming increasingly easy to complete important tasks and meet deadlines remotely or via phone. Banking too became more convenient with online banking beginning to take over and allowing customers to complete many banking transactions online. Similarly, issues like tax submission etc. have become more convenient with the advent of online systems and the availability of important submission forms to download.

The Revenue website is one area which has been making a marked move towards online services with many day-to-day checks and queries being able to be answered via the ‘myAccount’ area of the Revenue website. This week, Revenue have announced that development of the myAccount system is ongoing and that there would be changes imminent in the coming weeks, which we felt might be relevant to you.

Revenue have announced that from the middle of June, their PAYE anytime service would no longer be available. This is due to the ongoing works on the website and the findings that the service is not easily accessible on mobile devices. This shows a very marked belief in progress as the need to have all services easily accessed via a tablet or smartphone showcases our current and continued reliance on these devices. The PAYE anytime service was released in 2005 and has certainly served its time and purpose well but it is time to move on.

PAYE business will now be completed via myAccount through newly enhanced PAYE Services, easily accessed on all mobile devices. Interestingly, this will also be available through the very modern RevApp allowing you to have your tax issues and queries resolved at the push of a button.

Through these new services you will be able to:

  • Manage your tax 2017.
  • Review your tax 2013 – 2016.
  • Request an End of Year Statement (P21).
  • Add a Job or Pension.
  • View your Tax Credit Certificates and End of Year Statements (P21).

The new Revenue website will be available to view from early June on all mobile devices and PCs, we are never ones to complain about convenience.

Should you require any help, advice or guidance on your own tax or other business and financial matters, please don’t hesitate to contact us here at EcovisDCA where we will be happy to help.

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Offshore Disclosure Notification

It can often be difficult to remain abreast of changes to procedures in the financial sector if your business is not operating within this sector. Unfortunately it is essential to be aware of any changes which may affect your business operations.

The Finance Bill 2016 introduced a number of changes relating to Qualifying Disclosures made to the Revenue Commissioners regarding existing offshore assets as well as offshore income and gains. In recent days the Revenue Commissioners have been issuing correspondence regarding these changes in order to keep businesses informed ahead of the changes being put into place, so it is important to read all information carefully to ensure you understand these changes.

These new changes will be in effect from May 1st 2017 and will relate to disclosure which includes any of the below outside of the Republic of Ireland.

  • Income or gains arising or accruing outside of the Republic of Ireland.
  • Relevant accounts – applies to both bank accounts and share accounts.
  • Relevant property.

These changes mean that any disclosures made to the Revenue Commissioners from May 1st 2017 onwards relating to offshore assets, income or gains will not be afforded any mitigation of penalties, meaning that the penalty will be 100% of the underpaid tax. Disclosures made before this date will benefit from the usual mitigation of penalties imposed by Revenue. This can often significantly reduce the amount payable. As such, waiting until after this date can result in a significantly higher payment being due and we would advise against waiting in order to reduce this risk.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

 

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Voluntary Strike off VS Liquidation

Unfortunately, it is not always prudent or financially viable to keep your business going. To assist you if this is the case, we will today be discussing two ways in which your company can be formally closed down. We will be focusing on Voluntary Company Strike Off and Members Voluntary Liquidation – two very different processes which should not be confused. Rather than incurring the on-going costs of continuing to file annual returns, you can choose to either liquidate or strike the company off. It is inadvisable to simply abandon your company as this can incur ongoing costs as well as causing legal trouble down the line.

Voluntary Company Strike off is the process wherein a company is formally de-registered from the Register of Companies and the Revenue Commissioner. The liquidation process involves the appointment of a liquidator to collect and assign any existing assets.

Voluntary Strike Off is often seen as a quicker and more cost effective option than liquidation. This option is available to companies which have had little or no activity and have no more than €150 in assets or liabilities. Voluntary Strike Off leaves an option to restore the business open for a period of 20 years following the date of dissolution.

Members Voluntary Liquidation is the alternative option for companies which have had activity and remain solvent at the time of cessation. Members Voluntary Liquidation is often seen as the more correct way to dispose of a company as it is not possible to resurrect the company after liquidation.

Voluntary Strike Off is also a cheaper option than Members Voluntary Liquidation despite its inherent lack of finality,

If you require any further information on either Voluntary Strike Off or Members Voluntary Liquidation or indeed any business or financial matters please don’t hesitate to contact us. We are always happy to help.

 

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

TIS THE SEASON TO FILE TAXES

Fa la la la la la la la lateness carries penalties. Sorry, once the Christmas lights go up these things take on a life of their own. We are all aware of how urgent it is to ensure that our taxes are filed and the penalties which can apply in the event of late filing. As always we strongly advise staying on top of these matters and filing/paying early insofar as possible to avoid future issues. As we approach the end of the 2016 tax year, we would like to take a moment to advise you of some fast approaching deadlines which may slip under the radar in this festive season.

 

The due dates for payment of CGT (Capital Gains Tax) are:

 

15th December 2016 for disposal of assets in the period of 1st January 2016 to 20th November 2016.

31st January 2017 for disposals in December 2016.

It is pivotal that any chargeable gains arising during these time periods be paid up before the deadline to avoid further unnecessary complications.

 

Should a disposal fall under an unconditional contract, the disposal date will refer to the date of signing the contract, whilst if a disposal falls under a conditional contract, the disposal date will refer to the date on which the condition is satisfied.

 

Should you require any help, assistance or guidance on these or any other tax or business matters, please don’t hesitate to contact us.

 

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

DON’T FEAR THE TAX MAN

Don’t Fear the Reaper…I mean Taxman

 

Whilst the temperatures have plummeted in recent days (the weather outside, is indeed frightful), things are certainly set up for tax evasion investigations in Ireland. The recent push towards a further clamp down on tax evasion has been a hot topic of conversation in recent months. Minister for Finance Michael Noonan recently published his finance bill which promises a further clamp down on tax evasion and a reduced level of tolerance for these activities by closing certain loopholes currently in use. The new finance bill allows six months for getting affairs in order in terms of offshore assets which it is advised should be tidied up well before the clampdown begins in earnest.

 

It is reported that the Office of Revenue Commissioners will now have access to and be able to comb through an unprecedented amount of international data in order to begin this clamp down on tax evasion both on and offshore. As of next year, Revenue will have automatic access to information regarding income and assets in overseas institutions, which previously may have acted as somewhat of a loophole for Irish tax payers. Previously, there were a number of areas which were somewhat protected from this level of intense scrutiny which allowed for tax evasion to take place such as Bermuda, the Cayman Islands and Switzerland. This, combined with the Revenue’s new increase in technology for clamping down on tax evasion that we have previously discussed, will make it incredibly difficult for tax evaders to carry on normal activities.

 

Previously, in order to check Irish records against those of other countries, the Revenue would have had to place a request based on existing information or concerns. The new technology being put in place by the Revenue will allow for cross referencing between Ireland and other countries for data on individual cases which may previously have been unavailable to them. This in turn will allow them to paint a clearer and fuller picture of an individual’s tax affairs and to assess patterns for any suspicious or untoward behaviours. It is expected that Irish records will be automatically cross referenced with those of over 100 other countries by late 2018. This will bring Irish systems in line with those currently being used in the United States.

 

Paul Rigney of Revenue has stated that there will be time for individuals to set their affairs in order as per Minister Noonan’s finance bill but warned that there will be a zero tolerance policy after this point.

 

“Those with offshore assets have until May 1st to make a voluntary disclosure before Revenue uses the “full rigour of the new system. This is the last opportunity for people to come forward because after that, the penalties are severe.”

 

Therefore it is strongly advised that these protocols are followed in order to avoid issues.

 

Should you require any help, guidance or advice on these or any other financial or business matters please don’t hesitate to contact us here at DCA Accountants where we will be happy to be of help.

 

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

OVERVIEW BUDGET 2017

Continuing the trend over the last number of years, much of the budget details have already been leaked. And while the economy has performed relatively well this year, the room for manoeuvre was flagged as being limited.
Overall the budget favours spending increases over tax cuts by three to one. On the tax side of things, €500 million in cuts is offset by measures increasing tax revenue worth €195 million.

Reductions in universal social charge (USC) represent the main benefit for most people, with the key 5.5 per cent rate cut to 5% per cent.

What are the key points?

  • Tax rates & income bands remain unchanged
  • Tax credit for self-employed increased by €400 to €950
  • 0.5% cut in each of the 3 lowest USC bands
  • DIRT will reduce by 2% each year over the next 4 years (from 41% to 33%)
  • New Help to Buy incentive for first time buyers
  • Rented residential property interest relief increased from 75% to 80%
  • Mortgage interest relief extended to 2020
  • €1.2bn in funding for housing, with a goal to deliver 47,000 new social housing units by 2021
  • €5 per week increase in the state pension from March 2017
  • Capital Gains Tax further reduced to 10% for the sale of a business up to €1 million
  • €290 million earmarked to restore civil service pay cuts
  • Rent a room tax exemption increased by €2,000 to €14,000
  • 800 new Gardai to be recruited in 2017, and 2,400 new teaching posts announced
  • Inheritance tax reduced, especially from parents to children, where the threshold increases to €310,000
  • Tourism & Hospitality VAT rate of 9% unchanged
  • Cigarettes up 50 cents, alcohol & fuel duties unchanged
  • A new Sugar Tax by April 2018
  • Home Renovation Incentive further extended until 31 December 2018

We hope this information will be of benefit to you and your business. As always we are available should you have any further questions.

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

THE BRUISED APPLE

You would have been hard pushed to miss the recent upset in the taxation camp in the last couple of days as it was announced that a ruling took place on August 30th in relation to the tax arrangements of tech giants Apple in Ireland, the ruling stated that the company had been offered special treatment in Ireland. The European Commissioners will be required to raise a tax assessment on Apple in the coming months as the EU rules that the company’s Irish tax arrangements were illegal under state aid rules. This ruling is expected to come in the next couple of days. It is likely that the company could face a bill for back taxes of up to €13billion. Both the Irish government and Apple’s CEO Tim Cook have insisted that Apple were not in fact offered any special deal on taxation.

Whilst from the outward appearances a gain of this magnitude for Irish finances may seem like a bonus for important spending like hospital, schooling and housing, it has been stated that should all appeals be lost and this cash revert to the Irish state, it has been suggested by experts that it be immediately be used to pay down the national debt instead. Finance Minister Michael Noonan insisted that Ireland would appeal the ruling in order to;

“Defend the integrity of our tax system; to provide tax certainty to business and to challenge the encroachment of EU state aid rules into sovereign member state competence of taxation.”

Whilst Apple CEO Tim Cook has staunchly denied that there was any special treatment given, stating that:

“We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid. […]  We are committed to Ireland and we plan to continue investing there, growing and serving our customers with the same level of passion and commitment. We firmly believe that the facts and the established legal principles upon which the EU was founded will ultimately prevail.”

As well as stating that Apple are not only the biggest tax payer in Ireland, but the biggest tax payer in the world. The issue that arises here would be the damage that could be done to the business reputation of Ireland should this ruling come to pass and Ireland be ruled to have given illegal state aid to Apple in this case. Whilst the cash would be a boon to our debts, the government will not want to damage our international reputation with top global corporations with Minister Noonan going as far as to say that to collect the tax would be like “eating the seed potatoes” as the ruling could have far reaching implications for EU member states and their taxation systems as well as causing havoc for Ireland which has long been a haven for global companies due to the very nature of the taxation system in place.

Should you require any help or guidance with your own business or tax matters (the October 31st deadline for filing is approaching faster than you might think!) please don’t hesitate to contact us here at DCA Accountants where we will be happy to help.

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

WHOSE CASH IS IT ANYWAY?

In recent weeks, we have talked quite a lot about the current funding options available for Irish Small and Medium Enterprises (SMEs). As SMEs continue to become a large part of the Irish economy during the recovery, their funding has been an important topic to cover as it is important to ensure the survival and stability of these companies. As previously discussed, the banks remain the largest source of funding to Irish SMEs.

 

Recently, Revenue have warned SMEs about the possibility of additional tax charges on loans which may have been sold to so-called ‘vulture funds’. These vulture funds have long been a hot topic of contention when it comes to SMEs. It was recently discovered that the acquisition of distressed loan books can trigger a demand for withholding tax on interest paid on individual loans, for which the borrower is liable. Under Irish law, companies must deduct 20% tax on interest payments.

 

The problem for SMEs here is that as the banks remain their largest source of funding, this tax does not apply and as such these companies may be unaware of their tax liability should this loan be sold to a purchaser outside of the banks. If your SME loan was sold on by the bank, then you as the borrower may potentially be at risk for owing additional tax and interest along with penalties owed for time passed without payment. This issue becomes a larger and more costly one when it is considered that the issue may not be known for a number of years until finances are more deeply looked into.

 

Tax partner at MG Partners, Aisling Donohue has said that this issue has arisen due to a “combination of bad tax laws and unfairly worded contracts” and that this could cause major issues for SMEs looking to sell their business. “An adviser doing diligence could flag this as an issue and say the SME was exposed to possible interest and penalties and this would mean the company was worth a lot less.” Donohue also stresses the importance of remembering that this applies to companies and not to individuals to avoid further concern.

 

If you are concerned about this and the funding status of your own SME, we would suggest contacting Revenue directly for clarification or alternatively to ask Revenue to create a provision for paying interest gross to a non-banking entity. If you have any further concerns regarding this or any other business or financial issue, please don’t hesitate to get in touch with us here at DCA Accountants.

 

– – – – –

DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

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.