Accountancy
FORM 11 TAX RETURN PREPARATION – IRELAND
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:
Childminders Tax Relief Scheme
You could be entitled to the Childminder’s Tax Relief if:
- You mind three or fewer children in your own home at any one time and
- You earn no more than €15,000 per annum.
- You must have informed the HSE that you will be providing such services in your own home.
- You must be registered as self employed and registered under self assessment.
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
Irish rent tax credit
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
Training Course Fees
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
To get your tax return filed before the income tax deadline, please contact us on queries@accountsadvicecentre.ie
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.
Income Tax Return Deadline 2024 – Ireland
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 self-employed.
- Your only or main source of income is from (a) Rental income, (b) Investment income, (c) Foreign income, (d) Maintenance payments, (e) Fees that are exempt from PAYE or (f) if you have profited from share options or share incentives.
You are obliged register for Income Tax purposes if
- Your taxable non-PAYE income exceeds €5,000 or
- Your gross non-PAYE income exceeds €30,000.
If you do not use ROS to file your Income Tax Return , the tax deadline remains 31st October 2024.
What’s new in the 2023 Income Tax Return?
NON RESIDENT LANDLORDS
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
MORTGAGE INTEREST TAX CREDIT
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
What happens if you miss the Tax filing date?
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:
- If you file your 2023 Form 11 Tax Return after 31st October 2024 but before 31st December 2024 the surcharge will be calculated as the lesser of (a) 5% of the tax due or (b) €12,695.
- If, however, your 2023 Tax Return is submitted after the 31st December 2024, the surcharge will be (a) the lesser of 10% of the tax liability due or (b) €63,485.
Important Points to keep in mind:
- Any underpayment of your Income Tax liability will result in interest penalties arising.
- In order to avoid interest on overdue taxes, you must ensure that your Preliminary Tax is both (a) correct and (b) paid on time. If, for example, you pay a sufficient amount of Preliminary Tax but it’s paid after the tax deadline, then interest may accrue.
- A late filing surcharge is computed on the full tax liability arising in the year of assessment. It does not take into consideration any advance payments / payments on account.
To get your tax return filed before the income tax deadline, please contact us on queries@accountsadvicecentre.ie
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.
Increased Cost of Business Grant Scheme – Ireland
As part of Budget 2024, the government signed off on a package of €257 million for the Increased Cost of Business (ICOB). 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.
To Qualify for the ICOB Grant
To qualify for the ICOB grant your business must meet the following conditions:
- It must be a commercially trading business, currently operating directly from a property that is commercially rateable.
- It must have been trading on 1st February 2024 and your intention must be to continue trading for at least three months.
- Your commercial rates bill must be equal to or less than €30,000 for 2023.
- You must submit confirmation of your bank details to the relevant Local Authority.
- The business must be considered rates compliant. This includes businesses with phased payment plans in place.
- It must possess a valid Tax Registration Number.
- It must be tax compliant.
The Grant Amount
The 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):
- They specifically targeted businesses in the Retail and Hospitality sectors. Businesses operating within these sectors are now eligible for a second grant payment which is equivalent to the initial ICOB Grant amount.
- The closing date for eligibility confirmation which was 1st May 2024 has now been re- opened from 15th May to 29th May 2024.
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:
https://www.mycoco.ie/icob
https://www.dlrcoco.ie/sites/default/files/2024-03/ICOB%20User%20Guide.pdf
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.
UK Taxes – Furnished Holiday Lettings tax regime abolished from 6th April 2025
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 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.
What is a Furnished Holiday Letting (FHL)?
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.
Currently, FHLs benefit from the following tax advantages:
- There is a full deduction of interest on borrowings from FHL income.
- Currently, profits from furnished holiday lettings are treated as relevant earnings. Therefore, profits generated from FHLs can be treated as earnings for the purposes of making tax advantaged pension contributions.
- Capital Allowances on items such as furniture, fixtures and equipment can be claimed on your Furnished Holiday Let. You can also claim tax relief on certain refurbishment costs.
- On the disposal of the FHL, Business Asset Disposal Relief (10% CGT rate), Business Asset Rollover Relief and Gift Hold-over Relief may apply.
- Provided there is sufficient business activity to demonstrate a trading activity, FHL properties can qualify for Business Property Relief thereby reducing the value of the business for Inheritance Tax purposes by up to 100%.
So, what happens from 6th April 2025?
- Mortgage Interest Relief will be given as a 20% tax credit. This will result in a reduction in tax relief from 40% for higher rate taxpayers and 45% for additional rate taxpayers.
- The normal residential property CGT tax rate of 24% will apply.
- Relief may be available for the replacement of domestic items in line with the regulations for long term lets.
- FHL profits will no longer be treated as relevant earnings for the purposes of making pension contributions.
- Properties will no longer qualify for Business Property Relief, thereby increasing Inheritance Tax liabilities.
What actions can you take?
You may wish to consider your options before the rules are abolished in April 2025.
Options include:
- Continue renting your property as before but without the current tax advantages.
- Sell the property with the aim of benefitting from the 10% CGT rate.
- Gift the property with the aim of benefitting from Business Asset Disposal Relief and Gift Hold-over Relief.
- Change your rental strategy by renting your property on a long term basis.
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.
CRO mandatory requirement for company directors to provide PPSNs from 11th June 2023
The Companies Registration Office (CRO), under Section 35 of The Companies Corporate Enforcement Act (2021), will require Company Directors to provide their personal public service numbers (PPSNs) when filing the following forms. This will be a mandatory requirement from Sunday, 11th June 2023:
- Form A1- Company incorporation,
- Form B1 – Annual return,
- Form B10 – Change of director and, or in their particulars,
- Form B69 – Notification by the individual that he/she/they has/have ceased to be a director or secretary.
Directors’ PPSNs will be required for validation purposes only. PPS numbers, RBO numbers and VINs will not be accessible on the public register.
The purpose of the new disclosure requirement is to reduce the risk of identity theft by introducing additional identity validation checks. This will affect individuals who may, wrongly, hold more than twenty five active directorships under different name variations.
It is important to note that non-compliance will constitute a Category 4 offence.
Please be aware that if the PPS Number does not match the PPS Number held by the Department of Employment and Social Protection, this may result in the submission being rejected. Therefore, to avoid any discrepancies and delays with filings, Directors should act now to make sure that the information held by the DEASP is consistent with that held by the CRO. It’s important to keep in mind that CRO rejections could lead to late filing penalties and delays in meeting annual return filing dates.
In circumstances, where a director does not have a PPS Number, but has been issued with an RBO number in connection with filings with the Central Register of Beneficial Ownership, this RBO number can be used for the relevant CRO filings.
In situations where a director does not have either a PPS number or an RBO transaction number, they must apply to the CRO for an “Identified Person Number” by means of a Form VIF i.e. Declaration as to Verification of Identity.
The VIF requires the name, address, date of birth and nationality of the individual. It must be declared as true by the director and verified by a notary.
TO DO
- Directors should check that their personal details are consistent with those on record with the Department of Social Protection. Where DSP records need to be checked or amended, please be aware that Directors must do so themselves, as filing agents are unable to do so on their behalf
- Directors without a PPSN or RBO number should take steps to obtain a VIN.
For further information, please click the link below:
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 advice.