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Revenue’s New ‘Digital Transaction’ Tax

Tax for the Memories

Taxation is always a hot topic of conversation, particularly in recent months as Revenue have begun to clamp down on issues of taxation from non-filing and late filing to fraud. With Brexit continuing to cast a shadow of uncertainty over us here in Ireland, our focus moves more into Europe. Recently two new legislative proposals have been put forward by the EU Commission which could possibly have unforeseen consequences for Ireland.

These proposals relate to digital tax and aim to create a turnover-based tax in an attempt to provide both a long and short term solution for the treatment of digital tax transactions. Essentially, the proposals will involve a 3% tax on gross revenues of certain digital transactions based on the location of target customers, meaning that the targeted consumer area will be issued with a tax payment, creating a sort of symbiotic tax relationship between the country of origin and the country of consumption. An apparent win-win situation as both countries receive something positive whether a tax payment or the revenue from the endeavour itself.

To begin with, this will only apply to larger companies with turnover in excess of €750m worldwide, but it is hoped that in the longer term, these plans can apply to a wider range of companies. It has been suggested that the proposals are in direct contrast to the normal tax principles in that it applies to where customers are located as opposed to where the work actively takes place, and also doesn’t take into account whether the company is making any profits as it is generally based on gross revenues. It has also been suggested that it will be far more difficult to quantify as rather than the standard procedures, it will involve converting customer data and satisfaction into actual facts and figures for taxation purposes. This has been suggested as being somewhat damaging for the Irish market which has a long history of exporting. It has also been suggested that this could be damaging for Ireland as it somewhat diminished the value of our 12.5% tax rate as this digital tax becomes a cost for Irish companies. A reduction in the appeal of our tax rate could result in Ireland becoming a less attractive prospect.

It has also been suggested that these proposals could have adverse effects on competition and be economically damaging should these short term proposals be in place for longer than expected as a longer term solution is formulated. These proposals could potentially penalise smaller countries whilst rewarding larger, this would of course be damaging to Ireland. Perhaps the longer term solution will factor in the value both of the country of origin and the country of consumption, but both this and any adverse or positive effects remain to be seen.

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Revenue will no longer add charges for payments via Credit Cards

Re-Charging your Wallet

The convenience that comes with our current modern lives of being able to pay for and receive items immediately digitally as well as dealing with many or our transactions in a virtual manner does of course have its downsides. Whilst modern life has us all connected to each other at all times via our phones this does cause a new innate lack of face to face conversation and whilst being able to pay online using our cards is convenient, there is also the downside of so many hidden charges being applied to our accounts that we may not have accounted for in our budgeting.

There was good news in this regard earlier this month as it was announced that as of April 5th 2018, Revenue would no longer be adding charges for payments via credit card, whether these cards are personal, business or international. This will bring Ireland in line with new EU Rules enforced early this year which banned any surcharges on payment of tax liability. This charge could add as much as 2% onto the tax bill of those paying online. Revenue’s previous 1.1% charge was as a result of service provider charges, which will now be abolished for these payments.

Revenue have stated that this is in line with their focus on making it easier and more convenient for customers to do business online, which can only be a positive step in our busy digital modern lives, and one which we think will be of great benefit to all. Revenue have already taken steps to make online transactions easier with the upgrading of their MyAccount online service which takes the headache out of a great many tax issues and allows people to do most of their transactions from the comfort of their homes or offices, so we welcome any further changes that will ensure our clients and friends have clearer minds and fuller pockets at the end of the day.

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Revenue – New Changes To Be Aware of

We have spoken at length in the past about the many ways in which Revenue are striving to make it easier and more convenient for people to deal with their tax transactions online, from a revamping of the MyAccount system to a reduction in fees and a strong clamp down on evasion using all the digital tools at their disposal there has never been a better or simpler time to file or query your tax transactions.

Next year (2019) there is set to be an overhauling and modernisation process in place for PAYE. Throughout the month, employers are due to receive letters from Revenue detailing their plans for PAYE Modernisation. This modernisation will result in real time PAYE reporting and is due to be officially put into place in January 2019. The letters will be tailored to the company’s requirements utilising Revenue records as there will be different categories of letter issued to ensure that companies receive the information most relevant to their business. Companies using payroll software or smaller companies will receive different information than those who do not use software, or larger companies for example. Employers will be asked to submit employee lists and relevant details regarding their employees to Revenue later this year in order to set the wheels of PAYE modernisation in motion.

In addition to this major overhaul, there will be many other changes made, this month a new PPS number checker will be available via the online services allowing up to 10 PPS numbers to be verified at a time using names and the given PPS number, this will certainly be a vital new service. Later in the year a number of changes will be made to the Revenue Online Services (ROS) dashboard, giving a new look and increased functionality to the system. There will be a new service for “Employer Payroll Services” and a new “favourites” option allowing easier access to most used options.

It is hoped that these new changes will increase the ease with which employers and business owner can process their dealings with Revenue and that the increased functionality of the website itself will limit any confusion or issues making life easier for both the employer and Revenue as it should limit late filing issues etc.

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Finance options in wake of Brexit

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

PAYE Changes

Unfogging the Small Print

The new year period is a time of change each year and whilst so often many of our ‘New Year, New Me’ promises may not stick, there are certain changes in the financial field that are occurring this year that it would be easy to miss. As always, we want to keep you as fully informed as possible.

Until recently, some tax assessment was on what is known as the “earnings basis” and was calculated regardless of whether or not the income was paid to the individual during that assessment year. The PAYE system operates on what is known as the “receipts basis” as in the employer deducting tax from the income at the time of payment to employee. New changes to the Finance Act of 2017 will bring order to confusion and bring all in line with the PAYE system of operations, meaning that all assessments will be moved to the “receipts basis” of assessment.

Changes have been made to the PAYE (Pay As You Earn) system from January 1st 2018 that not everyone may be aware of. As of the beginning of this year, the statutory basis of assessment for most employment income is the actual amount of income received, thus placing the basis of assessment for Schedule E income in line with the operation of PAYE.

Further changes will be in effect from January 1st 2019 including a further modernisation of the PAYE system. From next year, employers will be required to report relevant payroll data to Revenue no later than the date of payment to the employee. There will then be an automatic end of year review carried out on all PAYE customers for the year 2019 and subsequent years.

There are a number of exclusions to the receipts basis who will not see this change, proprietary directors will not be required to make this move, and where there is a PAYE exclusion order in place, no changes will occur. The changes will be required of all other employers and employees.

It is hoped that these moves will have a minimal or non-existent effect on employers, who will still be required to make the deductions when payments are made using the PAYE system. Similarly, this move should also not affect employee wages. As we have discussed in the past, Revenue are eager to clamp down on outstanding tax issues, and are now making the positive move to bring everything in line on a statutory basis and bring parity where there was confusion.

For further information, we advise reading through the recently published Tax and Duty Manual Part 05-01-08 found at the Revenue website at your leisure.

Should you require any further guidance please do not hesitate to get in touch with us here at EcovisDCA where we will be happy to assist you in starting 2018 on the right foot.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

How Santa got his Tax Back

It may be the most wonderful time of the year, but it is also the time of year when people are likely to be more in need of an extra bit of cash in their wallets or accounts. Having possibly spent more than we intended to on Christmas presents having sworn that this year would be different, we may likely find ourselves in need of an extra boost of cash flow for the New Year.

Here at EcovisDCA we are always thinking of our friends and clients and, particularly at this time of year when our minds take more of a shift towards those we love and care about we thought that this would be a good opportunity to remind you all that the deadline for the four-year time limit for claiming tax back on expenses such as prescriptions, doctor fees, and tuition fees is fast approaching.

This may have fallen down the list of priorities in the run up to Christmas, but it is worth noting that the deadline for claiming expenses incurred in 2013 is 31st December 2017. It may be a wonderful way to start off the New Year on the right foot having completed your claim which has likely been on your mind for some time.

If you submit your claim to Revenue before 31st December 2017, you will be entitled to claim for all four years; 2013, 2014, 2015 and 2016, and you may be surprised to find that you are entitled to a refund. As always, the recommended route is through the PAYE Service on their MyAccount system, which has made making claims and filings infinitely easier in recent years.

Further information can be accessed on the Revenue website and as always our advice is to get your claim in as soon as possible and avoid waiting until the deadline is upon you.

Should you require any assistance or guidance on any financial or business matters, please do not hesitate to contact us here at EcovisDCA, where we are always happy to help.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

The Offshore Blues

With the Tax deadlines having just passed, taxation has been a hot topic of conversation in recent weeks, we have spoken in the past about the ways in which there will be an increased clamp down on tax evasion and this week, Revenue have confirmed that there is an inquiry underway to identify tax payers engaged in offshore tax evasion and avoidance. Recent leaks in the celebrity world have brought issues such as these to the forefront of public consciousness and now we are seeing this become a higher priority for Revenue themselves.

Changes made in the Finance Act 2016 means that now any tax payers engaged in offshore activities may face larger penalties and even prosecution for defaulting. The deadline for coming forward with declarations on offshore tax liabilities was May 5th 2017, and despite receiving over 2700 disclosures, it is thought that there may be many others.

As we have discussed previously, Revenue are embracing technological advances in order to tackle tax evasion and will be employing a system of data analytics to combat this offshore issue. According to Daniel Sinnot, Head of Revenue’s Research

“Data analytics is an integral element of Revenue decision making, and it works by having a ‘whole of taxpayer’ view. We use proprietary software to match the data that we receive from other tax administrations to Revenue’s taxpayer records, then cross-check against prior returns to ensure all relevant income and assets have been declared. We also feed the data into our social network analysis and anomaly detection tools, to highlight suspicious cases. Then, as we begin to carry out risk based compliance interventions, we use the results of our interventions to train machine-learning models that further refine our ability to recognise and target the riskiest cases.”  

Mr. Rigney also stated that Revenue study and examine the information published in the wider media, including all allegations within the so-called “Paradise Papers”. The disclosures already made have revealed that over half were related to British-based liabilities with others referring to the UK, France, Spain and Switzerland. Revenue have revealed that almost a third of the disclosures related to property, with 20% relating to shares.

It is clear that tax evasion remains a top priority for Revenue and as always we recommend early and efficient filing before deadlines to avoid any penalties or issues that may delay processing. Revenue have stated that they will continue to keep this as a priority and will investigate further as more information emerges.

Should you have any queries relating to any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to help you and your business.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

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