In the United Kingdom, the tax year commences on 6th April and ends on the following 5th April. HMRC have published a set of criteria which outlines the taxpayer’s requirements in order to accurately and correctly complete a self-assessment tax return. For further information please click link: https://www.gov.uk/log-in-file-self-assessment-tax-return
You are required to file a self-assessment form if you are a self-employed individual or if you receive untaxed income, for example, from rental properties. In other words, the self-assessment system applies to any individual whose income is not automatically taxed at source. To check if you need to file a self-assessment tax return please click: https://www.gov.uk/check-if-you-need-tax-return
For the 2023/24 tax year, taxpayers in receipt of PAYE earnings of up to £150,000 are no longer required to file a self-assessment tax return, provided, of course, that they do not meet any of the other self-assessment criteria outlined by HMRC.
The self-assessment deadline is 31st January 2025 for online submissions, however, if you submitted a paper tax return, the deadline was 31st October 2024. Please keep in mind that the tax is still due by 31st January 2025.
Online Tax Returns must be filed and all outstanding tax paid on or before 31st January following the end of the tax year.
In other words:
Failing to file your tax return or pay your taxes by the appropriate date can result in penalties. Missing the 31st January deadline comes can result in significant penalties even if no tax is owed. For full details, please click: https://www.gov.uk/self-assessment-tax-returns/penalties
In summary, missing any of the Self-Assessment deadlines can result in penalties and interest. A delay in filing your Tax Return by a single day can result in a £100 fine, even if you don’t actually owe any tax.
You can register for self-assessment through the HMRC website before the deadline of 5th October. For further information, please click: https://www.gov.uk/register-for-self-assessment
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
The Income Tax Return filing deadline is 31st October 2024. That deadline date is extended to 14th November 2024 provided you file both (a) your Income Tax Return and (b) your Income Tax Balance due for 2023 plus your 2024 Preliminary Tax.
When preparing your 2023 Income Tax Return, here are some Tax Reliefs you may not have considered before:
You could be entitled to the Childminder’s Tax Relief if:
No tax will be payable on the childminding earnings received, provided the amount is not more than €15,000 per annum.
As you cannot deduct any expenses, there is no requirement to maintain and keep detailed accounts.
If another person provides childcare services with you in your home, the €15,000 income limit is divided between you.
Despite the fact that you may have no Income Tax liability, you are obliged to file a Form 11 Tax Return by 31st October 2024 or 14th November 2024, whichever is relevant to you.
If, however, the childminding income exceeds the €15,000 annual threshold, the total amount will be taxed as normal under the self-assessment rules.
For further details, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-29.pdf
The Rent Tax Credit was introduced in Budget 2023 which is available for the tax years 2022 to 2025 inclusive.
In Budget 2024, the Rent Tax Credit was increased by €250.
When completing your 2023 Form 11 Tax Return the rent tax credit is worth a maximum of €500 per year from 2023 for a single individual and €1,000 for a married couple.
The rent tax credit is calculated as 20% of the rent paid in the year and is capped at €500 for a single person or €1,000 for a couple who are jointly assessed to tax.
When calculating your 2024 Preliminary Tax liability, the rent tax credit increases to €750 for a single individual and €1,500 for a married couple.
Please be aware that the claim must relate to rental payments which both (a) fell due and (b) were actually paid during the tax year of assessment.
This tax credit will only be available to taxpayers who are not in receipt of any other housing supports.
For further details, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx
Relief is available for fees between €317 and €1,270 paid in respect of Information Technology and Foreign Language courses which are on Revenue’s list of approved Courses.
To check the eligibility of your course, please click the following links:
These courses must be at least two years in duration and must not be a postgraduate course. Instead postgraduate courses in foreign languages or information technology may qualify for tuition fees relief. For further details, please click the following link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx
This relief applies to fees if you are the student or if you have paid fees on behalf of another person.
For complete information, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/foreign-language-and-it-courses/index.aspx
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
As you’re aware, the Income Tax / self-assessment Tax Return filing deadline is 31st October 2024.
There is an extension to 14th November 2024 providing you file both (i) your 2023 Income Tax Return and (ii) the Income Tax Balance due for 2023 as well as your 2024 Preliminary Tax payments though ROS.
You should register for Income Tax self-assessment if:
You are obliged register for Income Tax purposes if
If you do not use ROS to file your Income Tax Return , the tax deadline remains 31st October 2024.
The Non-Resident Landlord Withholding Tax (NLWT) system came into operation on 1st July 2023.
Collection agents of non-resident landlords may opt to use the NLWT system.
The 2023 Form 11 Income Tax Return contains a new section that should be pre-populated, providing the gross rental income figure and the withholding tax which have been processed through the NLWT.
For further information, please click: https://www.revenue.ie/en/property/rental-income/nlwt/index.aspx
For complete information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf
This credit was introduced for 2023 only.
This tax credit is for taxpayers who have made payments in respect of a qualifying loan for a principal private residence.
A new section has been added to 2023 Form 11 Tax Return for the purposes of claiming of the Mortgage Interest Tax Credit.
The relief is available to homeowners, who as of 31st December 2022, with an outstanding mortgage balance of between €80,000 and €500,000 and meet the necessary conditions.
For further information, please click: https https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/mortgage/index.aspx
For complete information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11B.pdf
If you fail to meet the October 31st Income Tax Return deadline, you could be liable to an interest charge for each day you’re late. Statutory Interest on the overdue tax liability is calculated at 0.0219% per day or part thereof.
This is in addition to a surcharge:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Changes to Company Size – Micro Company, Small Company, Medium sized Company, Large Companies and Groups
Today the Minister for Enterprise, Trade and Employment, Peter Burke TD, signed into law the “European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024.” This resulted in increases in the balance sheet and turnover thresholds for ‘micro’, ‘small’, ‘medium’ and ‘large’ companies in the Companies Act 2014 by circa 25%. The effect of this change in size is that more companies will move into the micro and small categories and, as a result, benefit through (i) abridged reporting requirements and (ii) the audit exemption.
On 24th December 2023, the EU Delegated Directive (2023/2775/EU) came into force. It increased the total balance sheet and turnover thresholds for micro, small, medium and large companies, including groups, as set out in the Companies Act 2014, by approximately 25% to account for inflation. The measures will apply for financial years beginning on/after 1st January 2024. This will enable companies to benefit immediately from the adjusted thresholds. Companies can elect to apply the new thresholds either (i) to financial years beginning on/after 1st January 2024 or (ii) to financial years beginning on/after 1st January 2023.
E.U. member states have until 24th December 2024 to bring this legislation into effect.
Today, 19th June 2024, Minister for Enterprise, Trade and Employment, Peter Burke, TD signed into law the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 (S.I. No. 301 of 2024) which comes into operation on 1st July 2024.
These size thresholds are contained in sections 280A to 280I of the Companies Act 2014.
Company size is typically determined by the company meeting two out of the three size criteria. Other relevant factors also apply.
These adjustments will result in more companies being categorised as micro or small which will, as a result, benefit from the abridgement and audit exemption. These changes are to apply to financial years commencing on or after 1st January 2024.
The increased size criteria/thresholds are as follows:
Please click for Regulations: https://www.irishstatutebook.ie/eli/2024/si/301/made/en/pdf
For associated articles, please click:
Annual Return for Companies – Ireland – Accounts Advice Centre
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
As Accountants, Personal Tax Advisors and Payroll Tax Consultants, the distinction between what constitutes an employee and what are the requirements to be considered a self employed contractor has occupied our minds for many years. It is often very difficult to determine with complete accuracy whether an individual has been employed under a contract of service or if that same individual could be deemed to be a Sole Trader, providing a contract for services. Over the years a number of tests have been developed to determine the status of the taxpayer. There has also been considerable case law on this matter.
On 20th October 2023, the Supreme Court delivered its unanimous decision in The Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza [2023] IESC 24 (the “Karshan Case.” It was held that delivery drivers of Domino’s Pizza should be treated as employees and not independent contractors. Today Revenue published their “Guidelines for Determining Employment Status for Taxation purposes” which outlines a five step decision making framework to determine the employment status of individuals for tax purposes: eBrief No. 140/24
According to Revenue:
“Where an individual is engaged under a contract of service, i.e., as an employee taxable under Schedule E, income tax, USC and PRSI should be deducted from their employment income through the employer’s payroll system on or before when a payment is made.
Where an individual is engaged under a contract for service, i.e., as a self-employed individual taxable under Schedule D, he or she will generally be obliged to register for self-assessment, to pay preliminary tax and file their own income tax returns using the Revenue Online Service (ROS).”
The guidance material asks the following questions:
In other words, there must be an exchange of work for wage/remuneration before a working relationship can be categorised as a “contract for service.”
A contract is considered to be an engagement where there is a payment by the business to the individual regardless of whether or not there is a written contract in place.
This test distinguishes between a situation where a worker provides services to a business personally versus where it’s possible for that worker to engage others to provide the services on his/her/their behalf.
The court judgment placed a strong emphasis on the degree of freedom the individual has to decide how the work is carried out.
It is essential to establish the level of control the business has over the individual worker. For example, can it decide what the particular duties are, as well as how, when and where the work should be carried out?
Is the worker carrying on the business of the organisation he/she/they work(s) for or is this individual working on their own account?
In other words, to what degree is the worker/individual integrated into the business?
Apart from reviewing any written agreement in place, it is vital that the facts of the working arrangement are examined to establish if the individual is working for the business or is providing services on his/her/their own account.
If the answer to any of the first three questions set out above are “No”, a contract of employment is not deemed to exist and the individual should not be treated as an employee.
If, however, the answer to the first three questions is “Yes”, then questions 4 and 5 of the framework must be considered to determine if a contract of employment exists.
The Guidelines also include nineteen practical examples which demonstrate the application of the five step framework to assist in determining how workers, in a number of different situations, will be taxed.
For Tax Advisors and Accountants, the most significant difference is the requirement on an employer to pay employer’s PRSI in respect of payments to employees, currently at the rate of 11.05% on weekly salaries over €441 or 8.8% if the weekly remuneration is below €441 per week.
Class A is applicable to most private sector employees with payroll taxes deducted at source:
Class S is applicable to Self-employed individuals:
The tax implications are not the only issues that should be focused upon. Employee rights must also be considered by Employers. These include:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
As part of Budget 2024, the government signed off on a package of €257 million for the Increased Cost of Business Grant Scheme. The main aim of this Grant is to support small and medium sized businesses by contributing towards their rising business related costs including energy, labour, rent, etc. In order to qualify the business must be a commercially trading business which currently operates from a property that is commercially rateable. If your business does not have rateable premises then you won’t be covered by this scheme. It is important to keep in mind that this is not a Commercial Rates waiver and businesses should continue to pay their Commercial Rates bill.
To qualify for the Increased Cost of Business (ICOB) grant your business must meet the following conditions:
The Increased Cost of Business (ICOB) grant is a once-off payment based on the value of the 2023 commercial rates bill.
The grant is 50% of the commercial rates bill for eligible businesses with a 2023 bill of less than €10,000.
The grant is €5,000 for eligible businesses with a commercial rates bill of between €10,000 and €30,000.
Businesses, however, with a commercial rates bill over €30,000 are not eligible to receive this ICOB Grant.
Please be aware that Public institutions and financial institutions will not be eligible for the grant, except for Credit Unions and specific post office services.
Vacant properties will also not be eligible for the ICOB Grant.
It is important to keep in mind that this ICOB Grant is not a Commercial Rates waiver. Rateable businesses are still required to pay their commercial rates to their local authority.
Today, the Government issued two important updates concerning the Increase in Grant Scheme (ICOB):
Local Authorities are expected to begin paying out the ICOB Grant to eligible businesses in the coming weeks.
For further information, please follow the links:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
The Chancellor of the Exchequer, Jeremy Hunt delivered his UK Spring Budget 2024 today. As you are aware, the Furnished Holiday Letting (FHL) regime provides UK Tax relief for property owners letting out furnished properties as short term holiday accommodations. From 6th April 2025, however, the Chancellor is removing this tax incentive in an attempt to increase the availability of long term rental properties.
According to HMRC’s guidance material, a furnished holiday let is deemed to be a furnished commercial property which is situated in the United Kingdom.
It must be available to let for a minimum of 210 days in the year.
It must be commercially let as holiday accommodation for a minimum of 105 days in the year.
Guests must not occupy the property for 31 days or more, unless, something unforeseen happens such as the holidaymaker has a fall or accident or the flight is delayed.
You may wish to consider your options before the rules are abolished in April 2025.
Options include:
For further information, please click: https://www.gov.uk/government/publications/furnished-holiday-lettings-tax-regime-abolition/abolition-of-the-furnished-holiday-lettings-tax-regime
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Close Relative Loans – Gift Tax Advice – Capital Acquisitions Tax (CAT). Inheritance Tax. Succession Planning.
With effect from today, Capital Acquisitions Tax (CAT) rules have changed. A new mandatory Capital Acquisitions Tax filing obligation is imposed on a person in receipt of a gift in respect of certain loans from close relatives. An interest-free loan is a gift on which Capital Acquisitions Tax must be calculated and any arising CAT must be paid. The value of the gift is the highest rate of return the individual making the loan could obtain if that person invested those same funds on deposit. It applies to existing loans as well as new loans made since January 2024, irrespective of whether or not any gift or inheritance tax is due. So what does this means for you in terms of succession planning?
Until 31st December 2023, there was no requirement to file a Capital Acquisitions Tax Return in respect of this type of loan, until 80% of the recipient’s group class threshold had been exceeded.
The aim of this new requirement is to provide the Revenue Commissioners with greater visibility with regard to loans between close relatives in circumstances where the loans are either interest free or are provided for below market interest rates.
The individual is deemed to have received the benefit on 31st December each year which means the relevant Capital Acquisitions Tax (CAT) return must be filed on or before 31st October of the following year. Therefore, the first mandatory filing date will be 31st October 2025.
A close relative of a person, includes persons in the CAT Group A or B thresholds, and is defined as follows:
There are certain “Look Through” provisions which must be applied to such loans. In other words, loans made to or by private companies will be “looked through” to determine if the loan is ultimately made by a close relative. Generally private companies are under the control of five or fewer persons. The holding of any shares in a private company is sufficient for these provisions to apply, including where the shares in the company are held via a Trust.
If someone receives an interest free loan of say €500k from a close relative’s company, the recipient of the loan would be deemed to take the loan from their close relative. As this exceeds the €335k threshold, this loan would be reportable.
These mandatory tax filing obligations apply in the following situations:
A mandatory filing obligation arises for the recipient of the loan where:
Whether or not a person exceeds the €335,000 threshold would need to be considered in relation to each calendar year.
A loan is deemed to be any loan, advance or form of credit. It need not necessarily be in writing.
All specified loans must be aggregated. Therefore, if a person has multiple loans from a number of different close relatives, the amount outstanding on each loan, in the relevant period, must be combined to determine if the threshold amount of €335,000 has been exceeded.
The first returns must be submitted by 31st October 2025 in respect of the calendar year ending 31 December 2024.
The CAT return must include the following information in relation to reportable loan balances:
For further information, please click: https://www.revenue.ie/en/gains-gifts-and-inheritance/filing-obligations/index.aspx
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Briefly, the Pillar Two rules include an Income Inclusion Rule and an Undertaxed Profits Rule . The Pillar Two rules provide that the income of large corporate groups is taxed at a minimum effective rate of 15% in all the jurisdictions in which they operate. The Pillar Two rules will have no effect for groups below the €750m threshold. Those groups will continue to be liable to the existing Irish corporation tax rules.
Ireland has legislated for the Pillar Two rules with effect from:
These rules apply where the annual global turnover of the group exceeds €750m in two of the previous four fiscal years.
Ireland signed up to the OECD Two Pillar agreement in October 2021.
The new minimum tax rate, which is effective from the 1st of January 2024, sees an increase from the previous corporate tax rate of 12.5% to 15%, for certain large companies.
Ireland will continue to apply the 12½% corporation tax rate for businesses outside the scope of the agreement, i.e. businesses with revenues of less than €750 million.
There are special rules for intermediate parent entities and partially owned parent entities as well as certain exclusions.
It is understood that Revenue estimates approximately 1,600 multinational entity groups with a presence in Ireland will come in scope of Pillar 2.
In addition, the EU Minimum Tax Directive (2022/2523) provides the option for Member States to implement a Qualified Domestic Top-up Tax (QDMTT).
A domestic top-up tax, introduced in Ireland from 1st January 2024, allows the Irish Exchequer to collect any top-up tax due from domestic entities before the application of IIR or UTPR top up tax.
The QDTT paid in Ireland is creditable against any IIR or UTPR top up tax liability arising elsewhere within the group.
It is important to keep in mind that IIR or UTPR top up tax may not apply in relation to domestic entities in circumstances where the domestic top-up tax has been granted Safe Harbour status by the OECD.
As there will be separate pay and file obligations and standalone returns for IIR, UTPR and QDTT, Revenue guidance material will be provided, in due course, in relation to all administrative requirements.
For further information, please click: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2523
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Finance (No. 2) Act 2023 introduced a new Capital Gains Tax relief – “Relief for Investment in Innovative Enterprises” or Angel Investor Relief. Its objective is to encourage investment in innovative small and medium start-up businesses entities. Please be aware, however, that not all types of angel investments qualify for the new relief. An investment, for the purposes of this Angel Investor Relief will only qualify if it meets certain conditions including that it’s based on a business plan and that the company can provide certificates of qualification issued by the Irish Revenue Commissioners including a certificate of going concern and a certificate of commercial innovation. It is also important to bear in mind that the Relief will not be granted if the investor owns the investee company.
This new Capital Gains Tax Relief provides a 16% CGT rate where a qualifying investor makes a qualifying investment in a qualifying company and subsequently disposes of those shares.
This new CGT Relief applies an effective rate of 16% on qualifying gains up to twice the value of their initial investment if the investment is made by an individual or 18% if the investment is made through a partnership. As you can see both rates are very attractive when compared to the standard 33% rate of Capital Gains Tax.
There is a lifetime limit of €3 million for the Relief.
The Relief, calculated as 33% – 17% for individuals or 33% – 15% for partnerships, is available on the lowest of the following:
Conditions for the Capital Gains Tax (CGT) Relief include the following:
The criteria governing certificates of qualification are provided for under s600F TCA 1997.
For the investor, a qualifying investment under the terms of the relief includes:
For the purposes of this Angel Investor Relief, the investor must not be “connected” with the investee company or any other company within the Relief Group. In other words, in order to claim this Relief, the investor cannot be a partner, director or employee of the relevant company or have any interest in the share capital of this or any company which is a member of the Relief Group. The investor must subscribe for shares in the investee company (i) for consideration wholly in cash, (ii) by way of a bargain at arm’s length and (ii) for bona fide commercial reasons.
For further information as to the criteria which define an “innovative company” please click: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014R0651
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.