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The Wheels on the Company Car Go…

In our ever shifting modern landscape it can be hard to stay consistently abreast of small changes to rules and regulations and amendments to costs we don’t often consider (is anyone else lamenting the increasing cost of stamps and feeling like their grandmother when admitting it? No? Just us?) Occasionally, changes to important parts of our everyday lives can be implemented almost without our knowledge as they may not be widely publicised or may simply fall beneath the din of the other news of the day. Here at EcovisDCA we want to ensure that you are always aware of changes which may affect your pocket whether positively or negatively, and today we want to inform you about a change to motor travel rates for Civil Servants which may have escaped your notice as these changes have not been massively advertised.

The motor travel rates for Civil Servants apply where employees use their private vehicles for business purposes. In these cases the costs can be reimbursed through the flat-rate mileage allowances which have been amended per a general review as of April 1st 2017.

  • Key changes to previous arrangements include:
  • Distance bands increased from 2 to 4, which may benefit workers who do a great deal of driving for business.
  • Lower recoupment rate for the first 1,500km.
  • Increased recoupment rate from 1,500 to 5,000km which again may benefit those who do a lot of business driving.
  • More beneficial compensation rates for cars with lower engine sizes and emissions, benefitting those workers already conscious of their carbon footprint and encouraging others to be more aware.
  • Changes to the mileage formula apply and rates will be locked in for a period of 3 years.

Should you require further information or guidance on how this may affect you and your business or any other business or financial issues, please don’t hesitate to contact us.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

ZOOM, ZOOM, ZOOM – CAR INSURANCE PRICES

If your car insurance was due for renewal in recent months, you would not be alone in having received quite the unwelcome shock when the renewal notification landed through your letterbox. Car insurance prices in Ireland are well and truly spiralling at present, and with no end in sight many motorists are now at risk of not being able to afford to keep their cars on the road. A recent meeting of the Joint Committee on Finance, Public Expenditure and Reform took place at Leinster House to focus on these issues as they continue to pose an immense threat to drivers.

Figures show that over a third of Irish drivers saw their car insurance premiums continue to rise meteorically in the last year, with many facing increases of up to 50% on their previous premiums. Whilst this is a financial issue facing the wallets and pockets of Irish drivers, it has also become an overall road safety issue which begs for rectification. As a consequence of these consistently rising costs, many drivers are unfortunately put in a position in which they must drive under reduced levels of insurance in order to manage their costs. This is both a financial issue for our country and a safety issue for all drivers as we have seen a recent 17% increase in accidents involving uninsured drivers as a result of rising costs that cannot be realistically kept up with, these rising costs do not correlate to your own claims or penalty points, but are an issue across the board for all drivers young and old. Many long-term drivers have experienced a hike of over 50% in the cost of their insurance premiums despite having never made a claim.

Conor Faughnan of the AA stated that rising costs were an issue of major urgency facing members of the AA and that

“Competition should be encouraged by the rising costs being seen, but that isn’t happening. Foreign insurers are in active retreat.”

Thus positioning this as a financial issue for the country as well as individuals. Faughnan also stated that foreign insurers fear the lack of clear information on insurance claims costs in this country and are wary on this front also. Whilst fuel costs are dropping, rising insurance costs ensure that drivers are feeling no benefit. Ireland Underground, a group of representatives of young drivers in Ireland have been quoted as saying that these rising costs have left Ireland’s younger drivers feeling

“As if they are besieged on all fronts by a sense of hopelessness.”

Once again, we are seeing our young people being hit hard by the financial issues which previously threatened their continued living in this country. It is not just our younger people here though being hit hard as older people are also finding themselves being hit by astronomical insurance premiums, and as a result are struggling to keep their cars on the road and maintain their own independence in this way.

Suggestions have been made to bring our costs and compensation in line with EU averages and allow greater competition for both Irish and foreign insurance companies in Ireland. According to the AA’s annual survey of motoring costs, the average cost of running a family car in Ireland has increased by €255.82 in the last year.

Should you require any assistance with your own finance management issues please don’t hesitate to contact us here at DCA Accountants.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

DCA Q&A – SHOULD I MAKE AN UNPROMTED DISCLOSURE?

Q: My business struggled in the past with meeting tax obligations, and has been selected for an audit covering 2011 and 2012. Having gone through the accounts for these years, I’m pretty confident that there are no problems. However, I’m concerned about a claim made for the 2010 tax year – new guidance issued by Revenue on allowable expenses and subsistence makes me worry that there would be an issue with it. The amount isn’t huge – I could afford to pay any tax bill arising from it – but I’m now somewhat worried that it could result in a significant fine or more problems. Should I disclose it, and what would the likely attitude be.

 

A: Yes. It might sound glib to say, but paying your taxes is the right thing to do – and, if you leave this to lie, it will be a constant source of stress.

 

There are very few arguments to support not disclosing the matter. If I were to play Devil’s Advocate, I’d say that Revenue are unlikely to look back into your 2010 accounts if 2011 and 2012 prove squeaky clean. But you’d be taking a major chance – and the longer it lies, the worse it will look.

 

If Revenue you make this as an unprompted disclosure, then you may be surprised at how flexible they can be. As you explain it, this appears to be a genuine mistake arising  from your misinterpretation of the law in lieu of Revenue guidance – I can’t speak without knowing all the details, but I would be optimistic about your chances of a settlement to pay any outstanding amount with some interest rather than a fine.

 

If you have been are preparing for this audit and disclosure yourself until now, I’d highly recommend getting professional advice. At DCA, we often go through a client’s books and help clear up issues like this. Don’t hesitate to get in touch if you would like an initial, no-obligation meeting to discuss your options.

 

Declan Dolan

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