Tax Tips

Jobs Initiative 2011

The Minister for Finance has announcd the Jobs Initiative 2011.

The main tax measures included in the Initiative are as follows:

  • Enhancement of the Research and Development (R&D) Tax Credit Regime.

At present we have a tax scheme that effectiely allows 25% of a company’s incremental expenditure on qualifying R&D to be off set against the company’s corporation tax liability or paid as a credit to the company.

  • PRSI on Share Based Remuneration.

The government has announced that they are going to abolish the employer PRSI on Share Based Remuneration that was announced by our last government.

    • New 9% VAT Rate.

A new temporary reduced VAT rate will be introduced for certain goods and services from the 1st July 2011 to 31 December 2013.

The rate applies to the following goods and services:

      • Catering and Restaurant Supplies, including vending machines and take-away food.
      • Hotel Lettings, includingguesthouses, caravan parks, camping stes etc
      • Cinema, theatres, certain musical performances, museums, art gallery exhibitions
      • Fairgrounds or amusement park services
      • The use of sporting facilities
      • Printed matter such as brochures, maps, programmes, leaflets, catalogues and newspapers
      • Hairdressing Services

       

      •  8.5% Rate of Employer PRSI Halved.

      The 8.5% of Employers PRSI is to be halved on jobs paying up to €356 per week. This change is to take effect from the 1st July 2011. The level of minimum wage is to be reinstated also.

      • Annual 0.6% Pension Levy.

      This levy is to apply to the capital value of assets under management in pension funds established in the state. The levy is to apply for a period of 4 years, commencing in 2011.

      • Air Travel Tax to be abolished.

      This is take effect from a date yet to be fixed and a revew of the measure will be conducted before the end of 2012 to evaluate its success.

      If you have any queries regarding the new jobs initiative please feel free to contact us.

Getting married? Did you know you may be entitled to a tax refund?

This is known as the Year of Marriage relief. A relief that a staggering number of married couples do not claim.

Married couples are taxed as single persons in the year of marriage. However, if it transpires that the total tax paid exceeds the tax that would have been paid if they had been treated as married for the full year they will be entitled to a refund.

A claim for this must be made jointly and in writing to Revenue in the year following the year of marriage.

If you have got married in the last 4 years and have not claimed this it is not to late, you can still submit your claim.

For assistance on making this claim and for calculations of refund due please contact us.

Mandatory online filing from the 1st June 2011

The following categories of persons/businesses must file their tax returns and pay any liabilities from the 1st June 2011:

  • All Companies.
  • All Trusts.
  • All Partnerships.
  • Individuals filing stamp duty returns in respect of Instruments executed on or after the 1st June 2011.
  • Individuals or companies filing 3rd part returns (Form 46G).
  • Individuals subject to the high earners restriction.
  • Individuals benefiting from or acquiring Foreign Life Policies, Offshore Funds or other Offshore products.
  • Individuals claiming property based incentives.

Remember this means that Revenue will not longer issues paper returns to the above mentioned categories, therefore if you normally used your paper return as a reminder to file your tax return care will have to needed to ensure filing and payment dates are not missed.

From the 1st October this year, employers with more than 10 employes will be also required to pay and file their P30s, P45s and P35 together with appropriate paymens online.

If you fall into any of these categories and are unsure how to proceed please feel free to contact us for assistance.

Preliminary Tax payable for 2011.

For those of you that pay preliminary tax based on 100% of your prior year liability revenue have confirmed that an amount of USC will also have to be paid. The USC to be paid will be an amount equal to the amount that would have been payable in 2010 had the USC been in existence at that point.

For further details please read the Revenue’s ebrief.

Paying rent? Did you know you are entitled to an additional tax credit?

An individual is entitled to tax relief at the standard rate of tax (20%) for rent paid in respect of a residence which is their sole or main residence.

This relief can also be claimed where a child is required to pay rent to their parents.

The maximum relief available is:

  • Single under 55 – €320
  • Married under 55 – €640
  • Single over 55 – €640
  • Married over 55 – €1,280

This relief can be claimed by one of the following methods:

If you require further information on claiming this relief please contact us.

Income Tax Returns – Should you be completing a return?

Are you unsure whether you are required to complete an Income Tax Return?

The following is a list of those individuals that should be filing Income Tax Returns:

  • Self-employed persons.
  • A director of a company of which they own more than 15% of the share capital.
  • Persons in receipt of the following types of Income:
    • Rental Income
    • Investment Income
    • Foreign Income and Foreign pensions
    • Maintenance payments from a former spouse
    • Fees.

If you or your spouse fall into one of the above categories you should be completing an Income Tax Return.

For advice on relation to completing your Income Tax Return please contact us.

Are you currently paying service/bin charges?

If the answer is yes, you may be entitled to a tax refund.

Tax Relief is currently available in respect of service/bin charges paid in a prior year, ie relief in 2011 is based on the service charges paid in 2010.

A maximum tax relief of €400 at 20% is given in respect of service charges.

If you have not previously claimed this relief you may be entitled to a tax refund for the last 4 years.

It should be noted that this relief is abolished from 2012 going forward.

If you require any further information on this relief please do not hesitate to contact us.

Are you a Coeliac or a Diabetic?

Did you know you can claim tax relief in respect of any food product manufactured specifically for coeliac patients or diabetics?

In order to claim this tax relief you should have a letter from your doctor confirming you suffer from one of the aforementioned conditions. The claim can then be made in the same way as a claim for health expenses via one of the following methods:

Receipts do not have to be sent to Revenue in support of your claim but should be kept for a period of 6 years in case requested by Revenue.

For details on claiming other types of medical expenses see our earlier tax tip – Are you claiming tax relief on medical expenses.

For further information on how to make these claims please feel free to contact us.

New VAT rules to apply to scrap metal industry from the 1st May 2011

Revenue have confirmed that from the 1st May 2011 that VAT those dealing in srcap metal will now have to account for VAT on the Reverse Charge basis.

This means that the recipent, rather than the supplier, will be accountable for the VAT on the supply of scrap metal made by him or her. The recipent will not pay the VAT to the supplier but instead account for it in his or her VAT return as Sales VAT. The recipent can then claim a simultaneous input credit on his or her VAT return as Puchases VAT.

For further information please see Revenue’s Scrap Metal guide.

If you need any assistance in preparing your VAT returns please contact us.

Are you making charitable donations?

If you are making donations in excess of €250 in any tax year to a registered charity you will be entitled to tax relief.

This tax relief operates differently depending upon whether you are a PAYE worker or a self-employed individual.

PAYE Wokers

When a PAYE worker donates to a charity relief is given to the charity. This is done by treating the donation as being net of tax, therefore the donation you make to the charity is deemed to be 80% and the charity can claim the 20% back from the Revenue.

For example, if an individual who pays tax at the lower rate of 20% donates €300 to a charity that charity can apply to receive and additional €75 from Revenue.

Self-employed individual

When a self-employed individual donates to charity they can claim a deduction for this on their Income Tax Return. This will reduce their taxable income by the amount donated.

For example, using the same details as above the self-employed individual would be able to reduce their taxable income by €300.