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Income Tax Deadlines 2017

As the deadline for paper filing has come and gone as of October 31st, the focus now shifts to the online pay and file deadline. This tax season has been an unusual one in many ways. It’s not very often that we find ourselves in a hurricane in Ireland, and even rarer that such a storm could bring with it tidings of good.

Revenue has extended the online pay and file deadline for self employed people as a result of Storm Ophelia and the business time lost as a result of office closures. The previous deadline was November 14th, and has now been shifted to midnight on November 16th to allow people to recoup that lost time.

Revenue has also announced that their help-desks will be open until 8pm each night leading up to this deadline, and will remain open until midnight on the deadline day itself. This is to ensure that any issues are dealt with in a timely manner to avoid late filing.

As always, our advice is to file early and avoid an over-reliance on extended deadlines where possible. Should you have any queries or concerns related to this, please feel free to contact us.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

No Budging the Budget – Budget 2018 Overview

The Budget is a contentious subject each years and a word which tends to eclipse all others in the weeks following its announcement. This comes as no surprise, as a country which has suffered enormous economic downturn in the recent past for there to be an enormous focus on an event such as the Budget which often gives a general idea of how heavy or light we can expect our wallets to feel in the coming year.

 

Budget 2018 was announced this week by Minister for Finance Paschal Donohoe. There were a great many predictions made in the week before the announcement but now that we have the facts to hand we will be breaking down the main points of the Budget and what it will mean for you and your business.

 

Positively, Ireland’s economic growth continues to rise, and Minister Donohoe has stated that he expects this to continue into 2018. This is welcome news for those who may not be seeing the economic recovery in their own pockets as yet, as there is a tentative promise that they may begin to do so in the coming months. Similarly, it was noted that unemployment figures are expected to continue to fall from the current 6.1% to 5.7% in 2018.

 

Here are the main points to note from Budget 2018:

 

Income Tax:

  • The entry point for the higher tax rate of 40% will rise from €33,800 to €34,550.
  • The 5% USC rate will drop by 0.25%, whilst the 2.5% rate is set to drop by 0.5%.

 

Property:

  • Stamp Duty on non-residential property being raised from 2% to 6%.
  • The Government are allotting €1.8million towards housing for 2018.
  • Mortgage Interest Relief for loans from 2004-2012 to be slowly phased out by 2020. Reducing to 70% in 2018, 50 in 2019 and 25 until the end of 2020.
  • The help to buy scheme is to be retained.

 

Business:

  • There will be a Brexit loan scheme of up to €300million made available to SMEs to assist with short term needs.
  • No changes to VAT rates for tourism and services sectors.
  • Social Welfare
  • All payments to be increased by €5 at the end of March 2018.
  • Social Welfare Christmas bonus to be paid at 85% of the usual rate. This is a €20 increase on last year.

 

Personal:

  • No changes to cost of petrol and diesel.
  • Cost of 20 cigarettes to rise by 50cent.
  • Sugar tax to be applied to sweetened drinks containing 8g of sugar per 100ml.

 

Health:

  • Prescription charges to be reduced for all under 70s with medical card by 50cent per item.
  • Threshold for Drugs Payment Scheme to fall from €144 to €134.
  • Home Carer tax credit to be increased to €1200 per year.

 

As always we are available for any advice or guidance you may require on business or finance matters.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

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.

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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.

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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.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

THE POWERS THAT BE…MORE POWERFUL

It was announced in the recently published Finance Bill that tax officials would be granted a whole new level of powers. In a move which has been considered by some to be of questionable moral grounding, as of now, tax officials will be permitted to access private financial information about individuals without being forced to inform those involved that their finances are being looked into.

 

Once a court appeal is granted, these tax officials will be able to access previously secure information from banks or other financial institutions without the knowledge of those affected.

 

Revenue themselves have also been granted additional powers in relation to searching properties and belongings for information when engaged in an investigation. Revenue have also been given more powers to utilise when dealing with those attempting to avoid Capital Gains Tax.

 

These measures are all part of a previously announced plan to increase the power afforded to the Revenue Commissioners and increase the ease and effectiveness of an extra clamp down on tax defaulters.

 

Previously, it was required that the Revenue would both need to know the identity of the suspected defaulter and that they would be required to inform those affected that their finances are being looked into, particularly when accessing secure information from parties such as banks and building societies. Now, however, these measures will no longer be necessary, providing the Revenue with a greater ease of access to the information. This may cause some boot quaking for some defaulters, which indeed may be part of the hope.

 

The only requirement with these new measures is that there must be “reasonable grounds” to keeping the information from the suspected defaulter which, given the circumstances will rarely be difficult to provide.

 

If you require assistance with your own tax and financial matters, please don’t hesitate to contact us at DCA Accountants.

BUDGET 2016: WHAT DOES IT MEAN FOR SME’S AND THE SELF-EMPLOYED?

It has been reported that SME’s now account for an enormous portion of all enterprise in Ireland. Unfortunately, SME’s and the self-employed rarely see their efforts being rewarded in any way when the time of the budget rolls around each year. Was the budget for 2016 any different? We have compiled some of the main changes that will affect both SME’s and the self-employed for your reference.

Self Employed Tax Credit               

 

It was announced in Budget 2016 that there would be a new earned income tax credit of €550 available for those who are self-employed, including farmers. Whilst this is still quite far behind the tax credits available to others, it is somewhat of a beginning for the process of not alienating the self-employed through taxation. It is suggested that this figure would be increased in future years.

Capital Gains Tax Reduction

 

There will also be a very welcome reduction in the Capital Gains Tax for 2016 for the self-employed and entrepreneurs. This reduction takes the tax from 33% to 20% on a gain up to €1 million, which could have significant positive consequences, despite still remaining quite far behind the UK and the North of Ireland in relation to this tax. The expenditure cap for Film Relief has also been increased to €70 million which is good news for this sector.

Farmers

 

Farming in particular was a sector which was more acknowledged in this budget than previous, as the general stock relief and the stamp duty exemption for young farmers was extended to 2018. It was also announced that a new succession transfer proposal would be put forward in order to increase certainty for the next generation of farmers and assist with a more long-term thinking that may not have been possible previously.

Microbreweries

 

Another sector of self-employment and SME’s that was newly acknowledged in Budget 2016 was the increasingly popular microbreweries. The excise relief for microbreweries will now be made available upfront. This is welcome news for the industry as it may help to free up some much needed cash flow which is always important for these SME’s.

In Conclusion

 

It is also hoped that the reintroduction of the Social Welfare Christmas Bonus of 75% will boost sales and income for SME’s, thus generating more revenue overall.

 

Unfortunately there have been few steps taken to support entrepreneurs in particular. Whilst these measures for the self-employed and SME’s in particular are small steps, at least these steps are finally being taken in the right direction and we would hope to see an end to the previous discrimination against these sector in future budgets, as SME’s begin to form the backbone of our modern economy.

KEY POINTS FROM BUDGET 2016

As the country watched with baited breath for what was promised to be a more forgiving budget than the previous efforts, there has been some questions over how much these changes may change things on a personal and professional level. We have compiled some of the key points to note from Budget 2016 for your convenience.

  • USC entry point raised to €13,000
  • USC reductions:

2015                            2016

1.5%                            1%

3.5%                            3%

7%                               5.5%

  • All USC bands lowered on earnings up to €70,044 per annum.
  • Minimum Wage to be raised from €8.65 to €9.15.
  • There will now be an additional €550 tax credit available to all owners of SME’s (Small and Medium Enterprises).
  • Normal tax bands will remain unchanged.
  • Child Benefit will increase by €5 per month, taking the total to €140 per child.
  • State Pension to increase by €3 per week for pensioners and carers aged 66years and over.
  • There is to be an increase in the Inheritance Tax Band relating to transfers from parents to children. The tax band will now stand at €280,000.
  • Social Welfare Christmas Bonus restored to 75%.
  • Cost of a packet of 20 cigarettes to increase by 50cent (including VAT).
  • Free GP care for children is to be extended to all under 12’s.
  • Fathers to be entitled to 2 weeks paid paternity leave as of September next year.

If you have any queries or concerns about how budget 2016 will affect your finances, please don’t hesitate to contact us at DCA Accountants.

BUDGET 2016 TAX CHANGES BREAKDOWN

Now that the highly anticipated and much talked about budget for 2016 has been announced, the one thing on everyone’s minds is “how will this affect me, am I really any better off now?” In the hope of clearing some of the most important topics of interest from the budget up for you, we have compiled a breakdown of the major changes in terms of tax.

Most changes are expected to come into effect on 1st January 2016.

Income Tax:

  • No changes in income tax announced for 2016.

PRSI for Employees:

  • There were some cuts to PRSI announced for lower paid workers announced in this budget. Employees earning between €19,552 and €21,355 can now access relief of up to €624 per year. There will also be some relief for those earning between €21,355 and €22,048.

PRSI for Employers:

  • Employers should also see a reduction in the cost PRSI as it was announced that the 8.5% rate would be made available to those who earn up to €19,552 which is an increase in threshold of over €1,000

Universal Social Charge (USC):

  • All bands reduced on all earnings up to €70,044.

2015                                        2016

1.5%                                        1%

3.5%                                        3%

7%                                           5.5%

  • Entry threshold for USC increased from €12,012 to €13,000.
  • Threshold for 3% rate widened to over €18,688 which is an increase of over €1000.
  • Threshold for 5.5% rate widened.

Tax Credit for the Self-Employed:

  • An earned income tax credit of €500 was introduced for those who are self-employed, farmers, and those business owners who are not eligible for a PAYE credit (which stands at €1,650) on their income.

Tax Credit for Home Carers:

  • The tax credit for home carers is to increase from €810 to €1,000.

Tax Increases on Products:

  • The only tax increase seen on products in Budget 2016 is a 50cent increase on a packet of 20 cigarettes. There was no sign of the proposed tax on sugar.

That’s it for our rundown of the main tax changes for Budget 2016, stay tuned for more updates and advice from us following on from these Budget announcements.

If you have any queries or concerns about how budget 2016 will affect your finances, please don’t hesitate tocontact us at DCA Accountants.

AIB TO THE RESCUE

The only thing more stressful and daunting to new business owners than an unexpectedly large bill landing on your office doormat, is that time of year when the “I know it’s going to be large, but maybe if I pray really hard it won’t be” barrage of annual bills come flying in. This year, AIB have come up with two new solutions to this common problem that might leave you imagining the logo wearing a cape.

For most business owners, the worst evil of annual bills, is their size and the fact that they need to be paid all at once. Without an enormous stockpile of gold in your basement, these bills can often loom over you and cause an unwanted interruption in your cash flow and savings potential. This is where AIB can step in (cue the superhero soundtrack) with their new Prompt Pay and Insurance Premium finance options.

As part of AIB’s ‘Backing Brave’ initiative, Prompt Pay and Insurance Premium are two newly announced short-term financing products designed to take the sting out of annual bills. The Prompt Pay product covers all large one-off payments – apart from Insurance payments, a shortfall which is picked up by the Insurance Premium product to assist both AIB and non-AIB customers manage their monthly outgoings.

These Prompt Pay loans must be a minimum of €5000 and be paid off within 11 months. Prompt Pay can assist customers with outgoings such as:

  • Preliminary tax
  • Pension contributions
  • Commercial property rates
  • Subscription fees to professional/trade associations
  • Annual audit fees

The greatest bonus for business owners in undertaking these loans is that both are offered at a fixed interest rate. This offers the peace of mind of knowing the cost of your monthly repayments in advance. The ability to spread these usually all-in-one costs over a period of 11 months can assist you in budgeting for the year ahead and help you to manage your cash flow without these lump sum interruptions. The only extra cost incurred here is a documentation fee of €63.49 which will be charged with your first repayment.

Both Prompt Pay and Insurance Premium proclaim themselves as easy to set up through your local branch. Should you have any concerns or wish to gain advice on your eligibility and finances in general don’t hesitate to contact us here at DCA Accountants.