Oh, What A Relief

Here at Ecovis DCA, we spend a great deal of time discussing issues that specifically pertain to Irish Small and Medium Enterprises (SMEs) due to their importance to the Irish economy and our clients. There is another vital area of the Irish economy that we sometime overlook, and it is one that the Irish economy overall was built upon, farming.

There are a great many intricacies to the farming career that many are not aware of. From taxation to the day-to-day general finance issues associated with running a farm there are many steps that are overlooked. Today we would like to focus on the issue of Capital Gains Tax (CGT) in relation to farming, as there are ways for CGT liability to be avoided by utilising Retirement Relief.

It is not massively well known that there are certain scenarios in which CGT may be charged on the transfer of ownership of a farm. These include:

  • Scenarios where the farmer is over 66 years of age.
  • Scenarios wherein the farm has not been owned for minimum 10 years.
  • Scenarios where the farm has been leased either fully or partially for a minimum of 25 years.
  • Scenarios where the farmer themselves were not working on the farm for a minimum of 10 consecutive years prior to the transfer.
  • Scenarios where the farm is under joint names with an individual who does not have any involvement with the farm.

These scenarios may possibly be circumvented by use of Retirement Relief. It is important to note that although the relief is called “Retirement Relief,” one does not have to actively retire from the farm to avail of this, but it is a useful tool for situations where you need to transfer ownership of the farm, without finding yourself liable for CGT.

There are some conditions to the use of Retirement Relief as one might expect.

  • If claiming Retirement Relief on medical grounds, medical evidence must be provided.
  • If claiming Retirement Relief on age grounds, the individual must reach age 55 within 12 months of transfer.

The Relief can be broken into two types depending on who the farm is being transferred to:

1) Transfer to your child.

Full relief can be claimed if the farmer is between 55 and 65 years of age at the time of transfer, after 66 years of age, the relief amount is capped at €3m.

The child receiving the farm must hold the farm for a minimum of 6 years, or CGT will be charged, and the relief will be forfeit.

2) Transfer to someone outside of the family.

Full relief can be claimed if the market value of the farm does not exceed €750,000 for individuals under 66 years of age, and €500,000 for individuals over 66 years of age.

It is vital to remember that these are lifetime limits, and the farm may not exceed these limits or the risk of being charged CGT remains.

 

We hope that this information has been of interest to you, and should you like us to cover more farm-related topics please do let us know as we would be happy to oblige.

The Ol’ Switch n Save

Given the changes we’ve seen to our economic landscape in recent years and the inevitability that these changes are having on our ever-lightening wallets, we are going to take a look at some potential cost-saving measures you might like to consider. Prices have recently been rising at the fastest pace we have seen in decades with inflation hitting the highest level it has been in over 20 years in March. This price inflation is expected to peak in the summer at an ultimate high of 8%.

“Inflationary increases” is something that may be a new experience for many, particularly after years of moderate price increases, however now the words “cost of living” are very much part of the general conversation. While at times the consistent increase in the general cost of living can seem insurmountable there are ways that individuals can offset these cost increases.

Energy:

One of the most dramatically escalating costs in recent months is the cost of energy. One of the simplest and least invasive ways of saving money on energy costs is to shop around and switch providers, who regularly offer cheaper deals to new customers signing up with them. bonkers.ie is a terrific way to compare price plans for all energy suppliers. And this notion of not staying with the same provider and shopping around for the best deal can also apply across the board for services such as car insurance, phone & broadband plans etc. so it is certainly worth the few moments of “hassle”.

With many providers offering special deals or discount rates for new customers, it is more than worth your while to shop around rather than stay with one provider because providers rarely have such incentives for loyalty!… And just to note, in order to shop around for your best energy deal, be sure to have your MPRN to hand.

Renewable Energy:

As technology continues to advance, so too do our energy-saving options. There are now ways to increase the self-sustainability of your home, while also having a positive impact on the environment.

One example is SEAI’s Communities Energy Grant (CEG) which supports energy efficiency community projects through capital funding and partnerships. There are twenty-seven companies across the country that can function as project managers for this grant to ensure that your property can reach its fullest energy-saving potential whether it is a domestic or commercial property.

Other ways of cutting costs while benefitting the environment include switching to an Electric Car. The price of petrol and diesel has noticeably increased exponentially in recent years and with more and more countries making the journey towards Net Zero, there are sure to be more taxes applied to fossil fuels as the years go on. Whilst the ESB has recently increased the cost of public charging, there are grants available for the installation of home chargers and for those with company cars, there are certain Benefit In Kind exemptions and discounts for converting to an electric car.

Mortgages:

Mortgages as a general term may not be synonymous with money-saving, but similarly to your utility bills, it is advisable to shop around and consider changing your provider as there is potential for significant savings. While the notion of swapping mortgage providers may be nerve-wracking the mortgage rate you are on can make a big difference to your monthly repayments so it is worth reviewing rates being offered by various lenders.

These are just a couple of small ways that savings can be found during these expensive times and we will come back to this topic to offer further ways to offset increasing prices.

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

New Code of Practice for Revenue Compliance

On 1 May 2022, Revenue’s new compliance intervention framework will come into effect. The recently announced framework was developed by Revenue in an attempt to further curtail non-compliance under all tax heads.

The aim of the new framework is to encourage taxpayers to review their tax affairs and to address any issues on non-compliance prior to receiving contact from Revenue. The structure of the framework is comprised of three levels: Level 1 considers actions of self-correction and voluntary disclosures, meanwhile Levels 2 and 3 deal with the confrontation of non-compliance based on circumstances and behaviour of the taxpayer.

Level 1
The objective of Level 1 is to facilitate efficient self-correction and self-reviews of tax affairs, allowing for taxpayers to submit unprompted qualifying disclosures to Revenue without the need for any in-depth intervention on the part of Revenue.

Examples of the extent of intervention under Level 1 include:

  • Reminders of outstanding tax returns
  • Requests to conduct a self-review
  • Profile interviews
  • Engagement with businesses under the Cooperative Compliance Framework (CCF)

Level 2
The scope of Level 2 interventions can range from the examination of one single issue to a full Revenue audit. In their new framework, Revenue outline the two types of intervention that might arise under Level 2:

  • Risk Review
  • Audit

Risk Reviews are a new concept that focus on a risk or small number of risks on a tax return. This is a desk-based intervention and is essentially replacing the Revenue Aspect Query which is being retired with the introduction of the new framework. However, unlike Aspect Queries, there will be no option to submit an unprompted qualifying disclosure once notice of intervention has been issued.

The practices and procedures of an audit intervention will largely remain the same under the framework.

Level 3
Level 3 interventions will tackle high-risk cases suspected of fraud and tax evasion. Interventions take the form of a Revenue Investigation. Once a notice of investigation is received, the taxpayer may make a disclosure to Revenue but they will no longer have the benefit of submitting a qualifying disclosure

Code of Practice Update
The Code of Practice for Revenue Compliance Interventions contains a number of other miscellaneous changes which also come into effect alongside the new framework on 1 May 2022. The key changes include:

  • It is now required that Revenue are notified in writing of a taxpayer’s self-correction without penalty.
  • It is no longer satisfactory for a return to be amended on ROS without written notice.
    The time frame for submitting a notice of intention to prepare a prompted disclosure has been increased from 14 days to 21 days.
  • Where there is a tax underpayment or overclaim of refund that is less than €50,000, details of the taxpayer will not be published on the tax defaulters list. This is an increase from the previous €35,000 threshold
  • Taxpayers will now have 28 days to prepare for an audit, an increase from the previous 21 day time frame
  • Qualifying disclosures in respect of tax underpayments relating to offshore matters can now be submitted

Click Here to read Revenue’s Full Code of Practice

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

Who’s in the house? Debt’s in the (ware) house!

Following on from the multiple economic changes that have come about following the Covid-19 pandemic we have spoken multiple times about the concept of “Debt Warehousing” and the availability of same for Irish businesses hit by the emergency. With restrictions recently fully lifted, the past number of weeks has been a busy one for many Irish businesses. We are now beginning to see signs of a strong recovery, allowing many businesses to begin once again hitting the ground running after a stressful period.

A great many companies have been in some way “saved” by Government assistance during the Covid-19 period that may otherwise have had to close their doors. One of the most popular options, next to the EWSS was the concept of debt warehousing. It was recently confirmed that up to €3.2billion in tax debt is currently being warehoused by Revenue for businesses financially affected by Covid restrictions, primarily large and medium-sized businesses.

These debts are currently warehoused under the understanding that they will remain parked interest-free with no requirement to begin payback until at least January 2023, with a spokesperson for Revenue recently confirming:

“There is no requirement to pay for most businesses until at least January 2023. At the end of the period, a tailored plan will be agreed with the businesses appropriate to their economic circumstances at that time.”

Some companies have already begun to pay off their warehoused tax debt due to the financial improvements gained from coming out of the lockdown periods. For companies that haven’t yet begun to pay, it is important to note that an interest rate of 3% per year will begin to apply from 2023. This remains a discount from the usual 8% interest rates that would apply to late tax payments. It is also important to stress that Revenue wants a business with tax debt to have engaged and proposed a repayment plan by the end of 2022.

While there remains some controversy with the scheme, with some thinking that more allowances should be made for struggling companies in terms of a tax write off or similar as the payback time looms closer, and others believing that the scheme is already too lenient and creates a level of unfairness in the market, there is no denying that the scheme has provided a massive level of assistance where needed.

At this moment of time, Revenue have confirmed that they have no plans to entirely write off these debts.

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

Happy Christmas from Ecovis DCA

Here at ECOVIS DCA we would like to wish all our clients a very Happy Christmas, and wish you and your business a prosperous 2022!

We will be closing for business on Thursday the 23rd of December and reopening on Tuesday the 4th of January 2022.

Revenue update on changes to EWSS subsidy rates

On December 9th 2021 the Minister for Finance, Paschal Donohoe, announced that the enhanced rates of subsidy provided for under the Employment Wage Subsidy Scheme (EWSS) will be reinstated for December 2021 and January 2022.

The revised rates are as follows:

 Weekly Pay 1st Dec – 31st Jan
(Enhanced rates)
1st Feb – 28th Feb
(Reduced Rates)
1st Mar – 30th April
(Flat Rate)
 Less than €151.50 €0 €0 €0
 €151.50 – €202.99 €203 €151.50 €100
 €203 – €299.99 €250 €203 €100
 €300 – €399.99 €300 €203 €100
 €400 – €1,462 €350 €203 €100
 Over €1,462 €0 €0 €0
 Employer’s PRSI 0.5% 0.5% TBC

Employers who have already submitted eligible EWSS payroll submissions in respect of December 2021, some of whom may have already received a subsidy payment calculated at a lower subsidy rate, do not need to take any action or make any amendments.

Revenue confirmed that, during the course of next week, it will identify the relevant payroll submissions, revise the calculation of subsidy due having regard to the enhanced rates outlined above, and process additional subsidy payments to the relevant employers shortly thereafter.

However, Revenue reminded employers that there is still a requirement to submit a timely monthly EWSS Eligibility Review Form (ERF) to ensure continued access to support under the scheme.

November’s EWSS ERF is due by 15 December 2021 and December’s EWSS ERF is due by 15 January 2022.

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help.

Debt Warehousing

As this year draws to a close, we find ourselves looking ahead to the year ahead. During the Christmas festivities, there looms a deadline which could easily slip down the list of priorities during this time, so we would advise getting organised in advance so that it doesn’t interfere with your work-life balance during this important season.

Any and all clients availing of debt warehousing will be required to have all their returns filed by January 19th, 2022. This includes any and all tax return matters. If this is not completed on time, there is the possibility that Revenue may deem you non-compliant with the scheme and decide to charge 8 – 10% interest rather than 0%.

The Debt Warehousing Scheme was set up as a method of helping businesses at the beginning of the pandemic by covering tax liabilities until the end of this year, with the added benefit of any repaid debt not facing any interest for the delay in payment during this time. The key condition of the warehousing scheme has been the necessity of filing returns on time, in this case by January 19th.

Recently, Revenue were questioned about plans to phase out the debt warehousing scheme with Social Democrats TD Catherine Murphy querying the plans and stating, “we don’t want to see a loss of viable businesses.” This ties in with recent pleas for the extension of the EWSS due to the current fragility of the Covid-19 pandemic and the increase in restrictions.

We hope that this information is of benefit to you and your business and that you all have a wonderful festive period.

As always, should you have any concerns or queries on any business or accounts issues, we here at EcovisDCA will be happy to assist.

Revenue online service technical support hours

Revenue Online Service Technical Support Hours

Revenue recently announced some extensions to their Technical Helpdesk which is aimed at providing support to customers facing difficulties in accessing the Revenue Online Service (ROS).

This extension is to facilitate the increased demand for helpdesk support which will naturally occur during the 2021 Income Tax period.

The new hours will be as follows:

  Date  Opening Hours
  Monday, 15 November 2021  09.00 – 20.00
  Tuesday, 16 November 2021  09.00 – 20.00
  Wednesday, 17 November 2021  09.00 – 24.00 (ROS Technical)
09.00 – 20.00 (Collector General’s)

Standard opening hours apply outside of these times.

Enquiries can be made to the Revenue Technical Helpdesk via the following avenues:

MyEnquiries:
Add a new enquiry under the ROS Technical Support from the dropdown menu.

Email:
roshelp@revenue.ie

Telephone:
(01) 738 3699 (for callers from abroad: +353 1 738 3699).

It is important to note that the helpdesk is solely for technical difficulties with the ROS system, helpdesk can not assist with any tax related issues. For these issues, it is important to contact Revenue directly via their Contact Us page.

In addition, for those who have seen at least a 21% income reduction as a result of Covid-19. customers may also opt to warehouse their 2020 balancing payment as well as their 2021 preliminary tax amount. Further information on the Covid-19 support measures available can be found on the Revenue Website.

what Budget 2022 means to you

What Budget 2022 Means To You

Budget 2022
It has been a busy few days for the Irish Government with not only the announcement of the annual budget yesterday but also the announcement last week that Ireland would be signing up to the OECD G20 Inclusive Framework agreement, with an increase in the well-known and discussed 12.5% corporation tax rate to 15% for certain companies.
The 2022 budget is being promoted as business-friendly by the Government when announcing around €1 billion in new spending measures and over €500 million in tax cuts.
There are plans to attract more foreign direct investment into Ireland with money going to IDA, Intertrade Ireland and many other state agencies to promote innovation and help businesses focus on digital technology.
So there was a little of something for everyone but it was by no means a giveaway budget and with inflation expected to hit 3.7% for September, according to the Minister, the highest level since June 2008, rising prices, as well as increases to the carbon tax, could eat into many of the measures announced.Below is a summary of the main tax changes that will impact businesses & their employees.

 For Business
  • 12.5% Corporation Tax rate to remain for Businesses with a turnover of less than €750m and this will increase to 15% for those with turnover above this.
  • The Emergency Wage Subsidy Scheme (EWSS) will be extended until the end of April next year, with a flat rate subsidy of €100 for March and April
  • The reduced VAT rate of 9pc for the hospitality sector will remain until the end of August next year
  • 50 per cent excise relief for small producers of Cider
  • Employment Investment Incentive scheme extended and reformed
  • €30million for State’s innovation equity fund, matched by European Investment Bank funding
  • Tax relief at 32 per cent for investment in digital gaming, up to €25million per project
  • Bank levy to be extended, but reduced to €87million
  • €60million for the extension of commercial rates waive on a targeted basis, from 2021 funding
For Aviation and Transport
  • €90 million aviation package, from 2021 funding
  • €60 million for capital and operational aviation grants
  • €1.4 billion for public transport networks
  • €25 million for a youth travel card
  • €360 million for active travel
For Tourism, Arts & Sport   
  • €50million for further business supports
  • €39million for enhanced tourism marketing
  • €25million for live entertainment supports
  • €55million for new media commission
 For Employees  
  • The threshold for the second USC band (2%) will increase slightly from €20,484 to €21,295.
  • The PAYE/employee tax credit and the personal tax credit will both increase by €50 to €1,700 i.e. €3,400 in total. This means most employees now won’t start paying income tax until they earn more than €17,000 – high by international standards.
  • The point at which people start paying the higher 40% rate of income tax will increase by €1,500 to €36,800 for a single person, however, this is still low by international standards. The cut-off point for married, one-earner couples will rise to €45,800.
  • The above measures will see a single person who earns over €36,800 benefit to the tune of around €415 a year while a married, one-income couple earning over €45,800 will benefit by around €465.
  • The earned income tax credit for the self-employed will also increase by €50 to €1,700 on the back of a €150 increase last year.
  • Income tax and employee PRSI rates will remain the same.
  • The minimum wage will increase by 30 cent to €10.50 an hour.
  • Those working from home will now be able to claim tax relief on up to 30% of their heating and electricity costs (up from 10% at present). The 30% relief on broadband costs, introduced in last year’s Budget, remains the same.
  For Motorists
  • Carbon tax will mean an extra €7.50 per ton of carbon dioxide emission
  • Petrol – per 60L fill, it will be an extra €1.28
  • Diesel – per 60L fill, it will be an extra €1.48
  • The Vehicle Registration Tax (VRT) will see a 1% increase for vehicles that fall between bands 9-12, a 2% increase for bands 13 to 15 and a 4% increase for bands 16 to 20.
  • €5,000 relief for electric vehicle batteries has been extended until the end of 2023
For Parents
  • €716 million packages including €69 million to freeze fees at services that take funding for improved staff terms
  • National Childcare Scheme universal subsidy extended to under-15s
  • Removal of pre-school and school hours from subsidised hours, to benefit 5,000 children from low-income families
  • Parents benefit extended by 2 weeks from next July
  • Back to School allowance up €10
  • Qualified children rate up by €2 for under 12s, €3 over 12s
For Housing
  • €6billion total funding, with €2.5billion for social housing next year
  • €174million for affordability measures
  • Zoned land to be introduced at a lower rate than vacant land tax – three per cent not seven per cent
  • Lead-in times for 2-3 years depending on when land zoned
  • Help to Buy extended by one year, and to be fully reviewed
  • €168 million in current expenditure, or 7 per cent increase, for 14,000 HAP tenancies
Tax consultation in Dublin

Revenue to withhold EWSS from firms who fail to file on time

Revenue to withhold EWSS from firms who fail to file on time.

As we are all aware, the emergency funds set up by the Government at the beginning of the Covid-19 emergency have seen many changes and adaptations over the last 18 months, both the Pandemic Unemployment Payment (PUP) and the Employee Wage Subsidy Scheme (EWSS) have continued to change and adapt to suit the current needs of the pandemic. Following on from the recent announcement of a move for Ireland from a period of continued restrictions to an easing into personal accountability and no further requirement to work remotely after late October, there are certain to be more changes and the likely phasing out of these schemes ahead.

We have often discussed in recent years, the many ways in which Revenue have automated their processes and functions to facilitate increasingly efficient compliance reviews, and in line with this, they have begun to increase checks on these schemes to ensure continued eligibility. As Covid restrictions begin to be lifted, new measures are required to ensure the smooth and fair operation of the scheme.

Revenue’s latest figures have shown that almost 41,000 employers were registered for the EWSS at the end of August 2021 and eligibility review forms have been issued to all. With only 70% of businesses having returned these forms, it is important to ensure that all business and financial information is up to date and presented to Revenue on time as Revenue will withhold all support payments from employers who fail to file their forms on time.

These previous deadlines had been amended on two occasions. Access to the EWSS will be effectively paused until forms are submitted. This system of pausing is in place from Sept 1st, once eligibility is confirmed, payments will resume. Revenue have clarified this by saying;

Where such businesses subsequently complete and submit the outstanding EWSS eligibility review forms, and thereby confirm they continue to meet the eligibility criteria of the scheme, they can resume claiming EWSS support […] Any subsidies claimed but not paid while EWSS eligibility review forms were outstanding will then also be processed for payment.”

We would advise getting eligibility forms submitted before the deadline each month for the previous month to avoid any delays or disruptions to your payments, which could financially damage your business. Should you have any concerns or queries on any business or financial matters please do not hesitate to contact us here at EcovisDCA where we will be happy to help.