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HOME IS WHERE THE TAX RELIEF IS?

Over the past couple of months, we have discussed tax and taxation issues at length. We have also talked about tax relief available and the many ways in which individuals may have overpaid tax and be due a rebate of some description. This week, we have decided to focus on one form of tax relief which is not as widely known about, and one which directly affects business owners and a great many Irish workers, namely the Trans-Border Workers Relief.

 

This is a form of tax relief available to an individual who is a resident of Ireland and commutes daily or weekly to work abroad and is as a result paying tax in that country on their employment income. This tax relief is an important one for those workers and business owners whose employment takes place entirely abroad, but their residence remains in Ireland. As a cross border worker, you are in the strange situation of having to pay income tax in the country of earning whilst your ultimate tax responsibility lies within your country of residence, therefore an annual self-assessment tax return must be completed each year regarding your world-wide income.

 

One thing to consider when working abroad is double taxation agreements. A double taxation agreement is in place between the UK and Ireland which means that you will be awarded credits for tax paid in the UK, if this applies to you we would recommend visiting the HM Revenue and Customs website for further information. Trans-border Workers Relief ensures that you do not pay additional income in Ireland, unless it is income earned from other Irish sources or you have chosen to be jointly assessed with your spouse.

 

As with all tax relief options, there are a few conditions you must meet in order to qualify.

 

  • Employment must take place in a country with which Ireland has a Double Taxation Agreement (detailed above)
  • You must be employed for a continuous period of at least 13 weeks of the tax year.
  • Your income from employment must be subject to tax in the country of employment and have been paid in full.
  • For each week worked abroad, you must be present in Ireland for one day.

 

If you feel that this may apply to you and require further information, it would be advisable to contact the Revenue directly in order to assess what the best course of action would be. Should you have any other concerns or issues you require financial advice on, please don’t hesitate to contact us here at DCA Accountants.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

NOT TODAY, MR TAX-MAN!

Tax credits are one of the most easily overlooked aspects of compiling your tax returns. Whilst they vary from person to person there are a number of additional tax credits you may be entitled to as a business owner without realising it. With the October 31st filing deadline rapidly approaching, your tax credits are not something you want to overlook, and knowing what you are entitled to could save you money. We have compiled a list of some of the tax credits you may not have considered but are entitled to.

 

Revenue Approved Permanent Health Benefit Scheme: If an employer deducts contributions from pay, no action is necessary to claim this relief. However, if an employer does not directly deduct contributions, this relief can be applied for in your annual tax return.

 

PAYE – Employee Tax Credit: Available to any employee whose pay is subject to the PAYE tax.

 

Health/Medical Expenses Relief: Available at a rate of 20% for certain medical expenses by completing the MED 1 form. If you have private health insurance, you will be unable to claim relief on any medical expenses which are due to be reimbursed.

 

PRSI: PRSI contributions can be directly queried through your local Department of Social Protection office.

 

Start Your Own Business Scheme: Available until 31st December 2016, this scheme provides tax relief for previously unemployed individuals who start a new business.

 

Start-up Refunds for Entrepreneurs (SURE) Scheme: Those interested in starting up their own company may be entitled to an income tax refund of up to 41% of the capital invested under this scheme. You may also be entitled to a refund of income tax paid over the 6 years prior to investment year.

 

Age Tax Credit: Available to anyone aged 65 or older during the tax year. This credit is doubled for married couples or civil partners if either is aged 65 during the tax year.

 

Single Person Tax Credit: Available to unmarried individuals living alone with the exception of married people who have chosen to be assessed as single people for tax purposed.

 

Married/Civil Partner Tax Credit: Available to an individual who is either married or in a civil partnership. One partner agrees to be the assessable spouse and is entitled to this tax credit as long as they are assessed through joint assessment.

 

Widowed/Surviving Civil Partner Tax Credit: This credit is dependent on when the spouse passed away and whether dependent children as involved. This tax credit will be higher during the bereavement year and is the equivalent of the above two credits.

 

As the deadline of October 31st approaches it would be advisable to submit your information in advance of this date if possible to ensure no unnecessary delays. Should you have any queries about your tax return filing, or if you are concerned that you may be entitled to claim some refunds that you may have overlooked, please don’t hesitate to contact us here at DCA Accountants.

TAX RELIEF FOR FIRST TIME ENTREPRENEURS

It was announced this month that there will be a revamp of a previously existing entrepreneurial scheme. This newly revamped scheme will mean that first time entrepreneurs will be able to claim back thousands of euro in tax relief in order to offset their start-up costs.

 

The SURE scheme (Start-Up Relief for Entrepreneurs) was recently launched by Finance Minister Michael Noonan and Jobs Minister Richard Bruton. The scheme comes as a response to the latest employment figures, which suggest that two thirds of all new jobs are created by new start-up companies. Minister Bruton has stated that this new tax relief is important because many start-up companies have “fallen into pitfalls where cash runs out before their potential is fulfilled.” This new scheme could mean increasing longevity for these companies who may need an extra push in today’s difficult marketplace.

 

Some of you may remember that a similar scheme had previously been in place as well as the capital gains tax incentive for new entrepreneurs. Mr Bruton has suggested that this previous scheme received a relatively small amount of interest, as there was a lack of understanding about what was involved in the process. It is hoped that the SURE scheme will offset these difficulties as it essentially involves directly offering assistance to those considering starting their own business. The funds will be offered up to a value of 41% of the total capital invested. Depending on the size of your investment you may be entitled to a refund of income tax paid over the 6 years prior to year in which you invest.

 

So, how do you know if you qualify for this scheme? The following are the basic guidelines:

 

You must:

  • Establish a new company carrying on a qualifying trading activity.
  • Have mainly PAYE income in the previous 4 years.
  • Take up full-time employment in the new company and not be employed elsewhere.
  • Make an investment by purchasing new eligible shares.
  • Hold at least 15% of the issued share capital of the company for 12 months.
  • Ensure that the company is a qualifying new venture.
  • Ensure that the company is incorporated in this or another EEA State.
  • Ensure that the company is between a micro or medium-sized enterprise.
  • Ensure that the company does not have any trading arrangements with your former employers.
  • Ensure that the company is not controlled by any other company.

 

These are, of course, just the basic guidelines to give you an idea of how to qualify for this exciting new scheme. If you should be interested in assessing your own eligibility for the SURE scheme, we at DCA Accountantsare here