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Revenue Irish Tax Firm

Changes to Tax Allowances

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Squeezing the Squeezed

There were some financially negative headlines this week, with publications announcing that many thousands of Irish workers now find themselves in the firing line for an apparent “tax grab” which would affect some of the lower paid PAYE workers in our country, ranging from employees of the hospitality sector (who already find themselves in hot water following the changing of their VAT regulations in this year’s Budget announcement) to construction workers and teachers.

Reports suggest that the Revenue Commissioners find themselves under fire for this apparent attack on our lower paid workers as it moves to take annual tax allowances away from these people from January 1st. This comes on the back of the Finance Minister being accused of not doing enough to protect the “squeezed middle” during the Budget announcements, and adds fuel to the fire of the public belief that the Government seeks to protect only the very wealthy in society.

As we have discussed in the past, the Revenue system has been undergoing a major overhaul in recent months, with a clamp down on tax fraud and evasion as well as changes to the online services and a general overhaul of Irish tax affairs. As a result of this, and following on from the taxation changes to be made in the hospitality sector, it is now reported that Revenue are beginning to look closely at other sectors to review the current flat-rate tax scheme.

This scheme is intended to cover some costs for workers such as tools and uniforms etc. By reducing the portion of income that a worker is required to pay tax on, this is intended to allow these costs to be covered without interfering directly with the worker’s take home pay. It is estimated that over 500,000 Irish PAYE workers currently avail of this scheme. Teachers and construction workers could find themselves the hardest hit by this change.

As of right now, there is no concrete information on these changes, and it will doubtless be ill-timed as it will eliminate any gains felt by the Budget for many employees. The only word from the Revenue Commissioners at present is that all allowances paid to all categories of staff who are eligible to claim tax relied will be examined as the review continues.

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.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

*Note: Since time of writing, new information has surfaced, suggesting that the Government may delay the implementation of the below until 2020, we will give more information on this when confirmed

VAT Increases for the Hospitality Sector

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Room with a View?

As discussed in last week’s Budget post, Budget 2019 snuck up almost unannounced and whilst it did not seem like much of a big news day for many, there were some who were hit by an utterly unexpected blow that could have far reaching consequences for many Irish business, particularly in the uncertain atmosphere surrounding Brexit.

One of the hardest hit sectors in this Budget, and the first to speak out against it is the tourism sector. It goes without saying that Ireland thrives massively on our culture of tourism and being the well-known “land of a thousand welcomes” so in the current uncertain Brexit climate it has come as quite a shock to this sector to receive the cutting blow of the removal of their special 9% VAT rate, to be replaced with the standard 13.5% rate going forward. It is estimated that this will cost the sector up to €500million a year, and that this is where the funds have been accessed to make the rest of the Budget’s announcements possible.

The idea for the removal of this rate was originally floated by Finance Minister Paschal Donohoe ahead of Budget 2018, but with Brexit looming this did not come to pass. The change comes following last July’s critical Department of Finance report which heavily suggested the special rate be scrapped, believing it to have served its purpose and to no longer be worth the cost to The State. In hindsight, glancing at the report now, the writing has been on the wall for this change for some time. Unfortunately for our tourism and hospitality sector, this does not make the pill any easier to swallow.

One of the most severe problems with this change is that Dublin has already been experiencing soaring hotel room rates in recent months. Chief Executive of the Irish Hotels Federation Tim Fenn has said that there has been widespread shock among the hotel industry.

“While we recognise that there was a need to raise revenue, in doing so it was incumbent on the Government to nurture growth in the economy. Tourism is growing. It is giving over €2billion a year to the Exchequer. 9% VAT was about the right rate, it brought us into line with our competitors in Europe, now 26 countries in Europe have a lower VAT rate. We are expected to compete with that”.

It remains to be seen what lasting effects this change will have on Ireland’s vital tourism sector and we hope that our clients and friends in this sector will find themselves weathering the storm to come out on the other side stronger.

As always, should you require any help or guidance on any financial or business matters, please don’t hesitate to contact us here at Ecovis DCA, where we are always happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Finance options in wake of Brexit

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Here at EcovisDCA our focus is always firmly on making life and business simpler for our clients and friends. We want you and your business to be a success just as you do and that all important work: life balance can sometimes only be achieved through the acceptance of a helping hand when in need. We have often spoken about funding options and opportunities available in order to either get your business off the ground or plan for an expansion and today we will be discussing a financing option with a twist: Growcap Finance.

Brexit is a word that has faded away into the middle distance somewhat in recent months after the term exploded into our general usage not too long ago. With Britain’s planned exit from the European Union still very much on the cards there is still some cause for concern for Irish businesses who may rely on foreign export or have had dealings with the UK. When engaging in global trade, one of the downsides for many business is the inevitable dealings with customs and VAT. Whilst many people sourcing goods may now look as far afield as China due to a newly improved quality of product, and lower pricing, there is always the issue of customs and VAT obligations when dealing outside the EU. It remains to be seen if Ireland will now face these issues in the future when dealing with goods from the UK once it is outside of the EU.

As a business owner it is your responsibility to ensure that any goods you have sourced from outside of the European Union get safely through the customs process and that the appropriate VAT is paid in full on entry. This can be quite a time consuming and painful process for business owners who have other issues to contend with as well as being an additional drain on vital cash flow to the business as VAT can add an extra 20 to 23% on to your existing payment. This is an issue especially for SMEs who may rely heavily on every penny of working capital available to them.

This is where Growcap Finance come in and can be of benefit to many businesses. Growcap Finance can assist you in funding your products sourced outside of the European Union, taking that additional headache away from you and freeing up some capital for your business. At present, Growcap can fund everything from the purchase price of the product to the logistics and VAT, while also ensuring that the product lives up to expectations before issuing payment. This may be an excellent option for businesses feeling the stress and headaches of dealing with VAT payments and shipments from outside the EU. It may also be a viable course of action in the event of a sudden Brexit.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY