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Pandemic Unemployment Payment

Pandemic Unemployment Payment (PUP) 

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2020 payments received: 

Payments received in 2020 under the Pandemic Unemployment Payment (PUP) are subject to income tax and universal social charge.

Individuals in receipt of PUP payments must complete an income tax return to receive their final statement of liability which will provide the final over or under payment for the year.

Revenue confirmed in September 2020 that PUP income tax and USC liabilities would become due at the end of 2020 and that the resulting liabilities could be discharged in one of two ways;

–    Pay any underpayment in full via My Account

or

–    Default option of discharging any underpayment arising due to the PUP payments over a four year period commencing in 2022 via a reduction in the annual tax credit entitlement.

As an example – Individual A has a €1,000 income tax underpayment for 2020.

This can be discharged as follows;

(1) Individual A can make payment of the €1,000 via My Account

or

(2) Revenue will reduce the individuals’ tax credits by €250 for the years 2022 to 2025 thereby recouping the underpayment via the PAYE system

2021 PUP payments:

In 2021 PUP payments will be taxes on a real time basis as follows;

The Department of Employment Affairs and Social Protection will notify Revenue on a weekly basis of the amount of PUP paid to each recipient.

Revenue will then collect any tax due by reducing the person’s tax credits and rate band.  To do this Revenue will “annualise” the weekly amount of PUP.

The adjusted tax credits and rate band are then applied on a Week 1 basis and the revisions will be reflected in the Revenue Payroll Notifications issued by Revenue to the person’s employer.

This process in 2021 should ensure there are no underpayments at the end of the year arising from PUP payments.

For more information on Pandemic Unemployment Payment visit revenue.ie

Or contact us

Revenue Irish Tax Firm

Important Tax Deadlines 2020

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We are living and working through some challenging times at present with a need to adjust to a ‘new normal’ which can be as difficult in the business world as it is in our home lives. As always, we here at Ecovis DCA want to help our clients and friends stay up to date, and have compiled the current tax return deadline changes we believe you may need to be aware of.

In light of the current public health situation, any shift in deadlines may make all the difference to your company. In addition to the below, it is worth noting that the HMRC are currently readying for Brexit, if your company has dealings with the United Kingdom, it would be wise to stay up to date on any changes here. In these volatile times, any shift in deadlines can be a massive boost to companies.

Income Tax:

The Government have recently stated that income tax will remain unchanged in the coming Budget. The deadline for self-assessed customers filing online will be extended from November 12th to December 10th.*

Corporation Tax:

Revenue recently announced a 4-week extension of the online filing system for Pay and File customers. The new date for customers submitting their 2019 self-assessment online will be Thursday, December 10th. Those not paying online must still file by October 31st. In addition to this change, Revenue has confirmed that the deadline for Corporate Tax return surcharge suspension will remain September 23rd.

Gift Tax:

Revenue has also announced that they will be extending the filing deadline for beneficiaries of gifts or inheritance for the year ending August 31st, 2020. This deadline has been shifted to December 10th for customers to make their CGT return, and as always this must be done via the Revenue Online System (ROS).

Local Property Tax:

For the third time, the reevaluation date for Local Property Tax has been deferred. The new date has been set as November 1st, 2021. This deferral is intended to bring forward legislation on the basis of fairness, bring new homes previously exempt into the system and to ensure that all monies collected in a given county will stay within that county.

Carbon Tax:

Minister for Finance, Paschal Donohoe has stated that he intends to repeat last year’s change to carbon tax and reinvest funds into areas that will assist with climate change.

*Please remember that these deadline extensions apply only to those filing online via ROS. If you are not filing online, your deadlines of October 31st will remain unchanged and failure to file on time may result in disciplinary action.

We hope that this information will be of use to you and that if these extensions are the wiggle room your company needs. As always, we here at Ecovis DCA are here for you. Should you require any assistance or guidance on any business or financial matters, please do not hesitate to contact us.

Enterprise Tax Relief & Grants

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Entrepreneurs exist in a section of Irish business that is often overlooked when it comes to grants, relief and assistance. It is an area that is prized and valued in terms of training initiatives, but often forgotten about when it comes to actioning. Entrepreneurship remains the riskiest sector of Worldwide business, but particularly in Ireland which is quite a small pond for any business-savvy fish to set up shop in. As we all know, SMEs form a massive part of all Irish businesses, and we have spoken recently about the ways in which increased support is being made available to these businesses, so this naturally begs the question as to why the same isn’t being extended to entrepreneurs who may be poised to become the next big names in SME or even large-scale enterprises.

The chorus of voices crying out for change and support in the entrepreneurship sector has increased exponentially in recent months. This call for change has begun to spread to state agencies with Enterprise Ireland becoming involved and in February, divisional manager of the high-potential start-up unit, Joe Healy went as far as to call entrepreneurs “The real heroes of the Irish economy who deserve recognition and attention”.

Mr Healy also revealed that Enterprise Ireland had invested €23million in start-ups in 2018, including many of the high-potential start-ups and expressed his belief that there should be increased support and recognition for entrepreneurial risk-takers as they are ambition, resilient and innovative, which should all be highly prized in the business world. Healy also expressed his desire that this support encourage more female entrepreneurs to take the lead in Ireland going forward as he has seen an increase in the number of female entrepreneurs in the last 2 years.

While there are currently no large-scale plans for governmental support of entrepreneurs, the government have been repeatedly called upon to overhaul the Capital Gains Tax system and the Employment Incentive and Investment Scheme for entrepreneurial candidates. With the addition of a state funded body like Enterprise Ireland adding their voices to the cry for change it is hoped that we may soon see more steps in the right direction. As Healy stated:

“There are still challenges around retaining and attracting talent, and we need to ensure that the tax system supports and encourages risk-takers […] Not only changes to reward the real heroes of the economy but the tax system must be internationally competitive […] The taxation environment is critically important for starting and scaling companies. It is a key factor in the overall competitiveness in Ireland […] There is a need for an entrepreneurs’ relief scheme to reflect the risks of setting up a business, and a share options scheme to reward shares.”

Perhaps we may soon see Irish entrepreneurs being capable of entering the worldwide business market in a more competitive manner. In times of financial recovery such as these “risk” can often seem like a dirty and dangerous word, but this is perhaps exactly the right time to reward innovators and risk takers.

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 are always happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Changes that could negatively impact your Pension

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Fail to Prepare?

If the economic climate of the last decade has taught us all anything, it is that it is never too early to start planning ahead for the future of you, your family, and your business. Often we forget that when the time comes for our retirement from the business world, State Pensions may not offer us the lifestyle we wish to have during the Golden Years of our lives. As such, it is always advised to begin looking into pension options as early in your working career as possible to begin saving for your own future and that of your family. We have spoken in the past about preparing your business for your departure, but preparation of the self can often be overlooked.

A recent report by leading pension actuaries Tony Gilhawley and Roma Burke has found that when it comes to State Pensions and the tax reliefs on same, public servants are the primary individuals who benefit from these reliefs. It is suggested that any movement to reduce tax reliefs may encourage Government workers to seek pay increases which could have consequences in many areas.

According to the report, the State’s contribution to the pension of public servants is on average just under 30%, or 53% for Gardai. This of course applies only to public sector workers engaged in employment before 2013. This is in stark contrast to the average private sector worker who will receive an employer contribution of as little as 7%, if they receive any employer contributions to their pension at all. The leading actuaries even went as far as to state:

“If you want to retire on a good secure pension, don’t work in the private sector. Join the public service.”

Suggesting that the current pensions system in Ireland is somewhat discriminatory against workers in the private sector. The report also suggests that there are incredibly few employers in the private sector willing to make decent contributions to the future pensions of their employees. Whether or not this discrimination is the case, or whether your own company chooses to contribute to your pension it is wise to begin looking into your options and begin making plans for your extended future beyond the working world.

Should you have any queries on any business or personal financial matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we are always happy to help.

HOME IS WHERE THE TAX RELIEF IS?

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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 PARTNERS, DECLAN DOLAN & EAMONN GARVEY

NOT TODAY, MR TAX-MAN!

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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

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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