Income Tax Return Deadline

Income Tax. Corporation Tax. Capital Acquisitions Tax. Capital Gains Tax. Local Property Tax. VAT. Pay and File Deadlines.

January is a very important month in terms of pay and file obligations.  To avoid exposure to interest and penalties, please find below a list of pay and file deadline dates for January 2025 under the following tax heads: Income Tax, Corporation Tax, VAT, Local Property Tax, Capital Gains Tax, Capital Acquisitions Tax, Dividend Withholding Tax and Professional Services Withholding Tax.

1^st January 2025

• 2024 Employment Detail Summary is available.

• The minimum Wage Increased to €13.50 per hour.

• Changes to USC – The 4% rate is reduced to 3% and the entry threshold increases to €27,382.01

• Changes to Rate Bands from €42,000 to €44,000 for individuals. Married couples and civil partners with one income will increase to €53,000 and married couples and civil partners with two incomes will increase to €88,000.

• Increases from €1,875 to €2,000 for Single Persons, Employee PAYE Tax Credit, Earned Income Tax Credits and Widowed Person or Surviving Civil Partner with dependent child(ren).

• Commencement of phased payments for Local Property Tax.

• Increases in VAT thresholds for goods and services. From €40,000 to €42,500 for services. From €80,000 to €85,000 for goods.

• The increased thresholds for Capital Acquisitions Tax: From €335,000 to €400,000 (Group Class A), from €32,500 to €40,000 (Group Class B) and €16,250 to €20,000 (Group Class C)

10^th January 2025

Latest date for paying Local Property Tax in full through an approved PSP, or by debit or credit card.

14^th January 2025

• Monthly Return and payment for PAYE, PRSI and USC for December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

• Quarterly Return and payment for PAYE, PRSI and USC for the period October to December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

• Return and payment of Dividend Withholding Tax for December 2024

•  F30 Monthly Return and payment of Professional Services Withholding Tax for December 2024

15^th January 2025

Monthly direct debit payments for Local Property Tax (LPT) start and continue on the 15th day of every month, thereafter.  Date extended to 21st March 2025 if paying by Annual Debit Instruction.

19^th January 2025

• Monthly VAT3 Return & Payment for December 2024.

• Bi-Monthly VAT3 Return & Payment for period 1^st November to 31^st December 2024.

• Four Monthly VAT3 Return & Payment for period 1^st September to 31^st December 2024.

• Bi-Annual VAT3 Return and payment for period 1^st July to 31^st December 2024.

• Annual VAT3 Return and payment for period 1^st January to 31^st December.

Return of Trading Detail:

• where the VAT accounting period ends between 1st and 31^st December and monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st November and 31^st December and bi-monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st September and 31^st December and four-monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st and 31^st December and annual VAT3 Returns are filed.

For ROS filers, the time limit for filing a VAT return is extended to the 23rd day of the month.

1^st to 21^st January 2025

• Corporation Tax Preliminary Tax for Accounting Periods ending between 1^st and 28^th February 2025

• Corporation Tax Returns for Accounting Periods ending between 1^st and 30^th April 2024.

•  Corporation Tax Balancing payments due for Accounting Periods ending between 1^st and 30^th April 2024

For ROS filers, the time limit for filing a CT Return and/or payment is extended to the 23rd day of the month.

31^st January 2025

• Payment of capital gains tax for assets sold between 1^st December 2024 and 31^st December 2024

• OSS VAT return and payment for the period 1^st October to 31^st December 2024

• IOSS Monthly Return and payment due for period December 2024.

For VAT details, please click:

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/vat-thresholds.aspx

https://www.revenue.ie/en/vat/vat-ecommerce/import-oss/index.aspx

For information on Standard Rate Bands and Tax Credits, please click:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

For further information on Local Property Tax, please click:

https://www.revenue.ie/en/property/local-property-tax/paying-your-lpt/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.

Property Taxes Ireland

Understand the Tax measures of Budget 2025 which relate to property transactions, at a glance.

Today, the Minister for Finance and the Minister for Public Expenditure, NDP Delivery and Reform, announced the details of Budget 2025.

As anticipated, Budget 2025 introduced several tax measures in relation to property.

This article will focus on the property related tax measures introduced by Budget 2025, under Income Tax/Personal Tax, Residential Zoned Land Tax (RZLT), Stamp Duty, Vacant Homes Tax (VHT) and Value Added Tax (VAT).

INCOME TAX / PERSONAL TAX

 Rent Tax Credit

• Budget 2025 raised the Rent Tax Credit

• The Rent Tax Credit has been increased to €1,000 for individual renters, or €2,000 per year for jointly assessed married couples/civil partners.

• This applies to the tax years 2024 and 2025.

• Prior to this, the Rent Tax Credit for 2024 was worth €750 for a single individual and €1,500 for a jointly assessed married couple/civil partners.

• As a result of Budget 2025, these new rates have been backdated to cover the 2024 tax year as well as the 2025 year of assessment.

 Mortgage Interest Relief

• Mortgage Interest Relief has been extended.

• There has been no change to the qualifying criteria.

• Homeowners must have an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 as of 31st December 2022.

• Qualifying homeowners will be eligible for this tax relief in respect of the increased interest paid on their mortgage in 2024 as compared with 2022.

• Tax Relief is at the standard Income Tax rate of 20%.  The Tax Credit is capped at €1,250 per property.

• To claim Mortgage Interest Relief, the taxpayer must file a Tax Return and the taxpayer must be compliant with Local Property Tax (LPT) requirements.

Help to Buy Scheme

• The Help to Buy Scheme has been extended for a further four years at the current rates until the end of 2029.

• The aim of the scheme is to provide certainty for future homebuyers as well as the Irish property market.

• The Help to Buy Scheme is a tax rebate available to first-time buyers to enable them to buy a newly built or self-built house or apartment provided the cost of that purchase is €500,000 or less.

• With the extension of this scheme, first-time buyers of residential property will be able to continue to avail of (i) Income Tax and (ii) Deposit Interest Retention Tax refunds to help them purchase their home.

• The scheme offers a tax refund to first-time buyers, with a maximum value of €30,000 or 10% of the property price, whichever is less.

• The refund will be from the four tax years prior to when the application is made.

• The refund will not include any refunds already claimed.

Pre-Letting Expenses Relief

• Under Pre-Letting Expenses Relief, the current tax relief, capped at €10,000 per premises, for certain pre-letting expenditure will be extended for a further three years to 31^st December 2027.

• Section 97A TCA ‘97, which deals with rental expenses, provides that certain expenses incurred on a vacant residential property before its first letting following a period of non-occupancy are allowable as a deduction against rental income from that specific premises.

• To be allowable, the pre-letting expenses (capped at €10,000 per property) must be incurred on a property that was vacant for a minimum of six months and is then let as a residential property on/before 31^st December 2027.

• These provisions allow for a deduction for certain pre-letting expenses which, otherwise wouldn’t be allowable.

RESIDENTIAL ZONED LAND TAX (RZLT)

• As part of its strategy to meet an increased demand for housing, the Irish Government introduced the Residential Zoned Land Tax (RZLT), which is a new tax on land which is zoned for residential development and which has, in place, all the necessary services to develop housing.

• It was originally introduced in Finance Act 2021 and stated that owners of lands which are zoned under the RZLT were to be taxed at a rate of 3% of the site’s market value from 1^st February each year commencing in 2025.

• Owners whose properties are subject to Local Property Tax and have a garden exceeding one acre will not be obliged to pay Residential Zoned Land Tax. They will, however, be required to complete and file a Tax Return containing details of the property.

• Budget 2025 has provided landowners with an option to re-zone their land, based on the economic activity carried out on their land and to seek changes to the zoning maps in advance of the final maps being published on 31^st January 2025.

• In summary, Budget 2025 has announced a new process available to certain landowners to obtain an exemption from the tax in 2025 where their land should not be subject to the tax.

• Budget 2025 has also introduced a twelve month deferral of the liability between the date planning permission was granted and the commencement date of the development

STAMP DUTY

New 6% Residential Rate

A new 6% rate of Stamp Duty has been introduced on residential properties from 2^nd October 2024.

The stamp duty rates for residential properties will now be as follows:

• 1% on consideration up to and including €1m

• 2% on consideration over €1m and up to and including €1.5m

• 6% on consideration over €1.5m

The existing stamp duty rates will continue to apply to instruments executed before 1^st January 2025 on foot of a binding contract in place before 2^nd October 2024.

10% rate for Bulk Purchases increased to 15%

• Where a person acquires at least ten residential units during any twelve month period, the higher rate of stamp duty is being increased from 10% to 15%, with immediate effect.

• The existing 10% rate will continue to apply to instruments executed before 1^st January 2025 where a binding contract was in place before 2^nd October 2024.

VACANT HOMES TAX (VHT)

• A Vacant Homes Tax (VHT) was introduced by the Irish Government in Finance Act 2022 to encourage an increase in the supply of residential properties available for rent or purchase. As a further incentive, Budget 2025 has increased the rate of the VHT from five to seven times a property’s existing base Local Property Tax (LPT) liability.

• This will take effect from 1st November 2024 i.e. the next chargeable period for Vacant Homes Tax.

• VHT applies to any residential property which is occupied for less than 30 days in a twelve month period between 1st November and 31st October of the following year.

VALUE ADDED TAX (VAT)

VAT Rate on Heat Pumps

• A reduction in the VAT rate for heat pumps to 9% is effective from 1^st January 2025.

• This applies to the supply and installation of heat pumps.

• The heat pumps must meet specific technical standards, as outlined in the EU Directive.

• The aim is to encourage homeowners to install heat pumps to support climate action.

VAT Rate for Gas & Electricity

• The 9% rate of VAT on gas and electricity is to be extended until 30^th April 2025.

• The rate had been due to revert to 13½% on 1^st November 2024.

• The aim of this extension is to reduce the cost of living.

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

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.

Personal Tax Advice – Budget Ireland 2025

Understand the Income Tax measures of Budget 2025 at a glance.

Today, the Minister for Finance, Jack Chambers T.D., and the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D., announced the details Budget 2025.  As anticipated, Budget 2025 introduced several tax measures affecting individuals, families and households.  This article will focus on the tax measure introduced by Budget 2025, specifically under the Income Tax or Personal Tax heading.

Standard rate band increased by €2,000

• The income tax standard rate band has been increased by €2,000 for all earners, resulting in the band for single individuals increasing from €42,000 to €44,000

• The band for Single, Widowed or Surviving civil partners, qualifying for the Single Person Child Carer Credit was raised from €46,000 to €48,000,

• The band for married couples/civil partners with one earner will be increased from €51,000 to €53,000 for the 2025 tax year onwards.

Increase in Tax Credits

• The Personal Tax Credit, Employee Tax Credit and Earned Income Credit will all be increased from €1,875 to €2,000.

• The Home Carer Tax Credit has increased from €1,800 to €1,950.

• The incapacitated child tax credit has been increased by €300 from €3,500 to €3,800.

• The Single Person Child Carer Tax Credit will be increased from €1,750 to €1,900.

• The Blind Tax Credit will be increased from €1,650 to €1,950.

• The Dependant Relative Tax Credit will rise from €245 to €305.

• The Rent Tax Credit has been increased for the tax years 2024 and 2025. It will be €1,000 per year for individuals and €2,000 per annum for a jointly assessed couple (married or civil partners).

• The Sea-going Naval Personnel Tax Credit has been extended for five years to 31^st December 2029.

Other Personal Tax Reliefs

• Mortgage Interest Relief has been extended. There has been no change to the qualifying criteria.  Homeowners must have an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 as of 31st December 2022. Qualifying homeowners will be eligible for this tax relief in respect of the increased interest paid on their mortgage in 2024 as compared with 2022. Tax Relief is at the standard Income Tax rate of 20%.  The Tax Credit is capped at €1,250 per property.  To claim Mortgage Interest Relief, the taxpayer must file a Tax Return and the taxpayer must be compliant with Local Property Tax (LPT) requirements.

• The Help to Buy Scheme has been extended for a further four years at the current rates until the end of 2029.

• Pre-Letting Expenses Relief. The current tax relief, capped at €10,000 per premises, for certain pre-letting expenditure will be extended for a further three years to 31^st December 2027.  Section 97A TCA ‘97, which deals with rental expenses, provides that certain expenses incurred on a vacant residential property before its first letting following a period of non-occupancy are allowable as a deduction against rental income from that specific premises.

• Various farming related Tax Reliefs have been extended until 31^st December 2027 including (a) Enhanced Stock Relief for Registered Farm Partnerships, (b) Stock Relief for Young Trained Farmers as well as (c) General Stock Relief.

• Budget 2025 introduced a BIK exemption for home car chargers provided by employers. It provides for an exemption from Benefit-in-Kind where it is the employer who incurs the cost of providing a facility for electric charging of vehicles at the home of an employee or director.

• The proposed tapering of Benefit-in-Kind Relief for electric vehicles has been deferred. The universal relief of €10,000 which applied to the Original Market Value of a vehicle in Category A – D is being extended to 31^st December 2025.  The amendment to the lower limit of the highest mileage band has also been extended until 31^st December 2025.   Therefore, the highest mileage band is entered into at 48,001km.

Small benefit exemption

• There will be an increase in the annual limit of the small benefit exemption from €1,000 to €1,500.

• It has also been amended to allow five non-cash benefits, up from two, to be granted by an employer in a single year. The cumulative total of the first five benefits in a calendar year cannot exceed €1,500.

• From 1^st January 2024 an employer is required to return details of all qualifying incentives provided to employees where the small benefit exemption applies.

• This benefit can be given to any employee of the company, including directors and shareholders, providing they are on the payroll.

Universal Social Charge

Various amendments to the USC system were introduced in Budget 2025.

• The 4% rate of USC will be reduced to 3%.

• The 2% USC rate band will increase by €1,622, from €25,760 to €27,382.

From 1^st January 2025, the USC Rates and Bands will be:

• €0 – €12,012 – 0.5%

• €12,013 – €27,382 – 2%

• €27,383 – €70,044 – 3%

• Balance – 8%

Self-employed income over €100,000 will be liable to a 3% surcharge i.e. 11%

PRSI

• All classes of PRSI will increase by 0.1% percentage point from 1^st October 2024.

• From 1^st October 2024 the minimum annual PRSI contribution is €650.

• There will be a further 0.1 percentage point in October 2025. From 1^st October 2025, (i) the employee PRSI rate will increase from 4.1% to 4.2%, (ii) the employer PRSI rate will increase from 11.15% to 11.25% and (iii) the rate will rise from 8.9% to 9% in situations where the weekly income is €496 or less.

• From 1st October 2025, the self employed PRSI rate will increase from 4.1% to 4.2%.

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

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. Self assessment Taxes. Personal Taxes. UK Tax Returns

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 31^st October 2024.  Please keep in mind that the tax is still due by 31^st 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:

1. the online 2023/2024 self-assessment tax return must be submitted on or before 31^st January 2025.

2. The deadline for paying tax due for the 2023/24 tax year is 31^st January 2025 and

3. The first payment on account for the 2024/25 tax year is 31^st January 2025

Failing to file your tax return or pay your taxes by the appropriate date can result in penalties. Missing the 31^st 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 5^th 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.

Filing Tax Returns. Income Tax. Personal Taxes. Self assessment. Sole Traders. Company Directors

The Income Tax Return filing deadline is 31st October 2024.  That deadline date is extended to 14^th 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 31^st October 2024 or 14^th 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:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-languages-2009-10.pdf

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-it-courses-2014.pdf

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.

ROS Pay and File self assessment Income Tax and Capital Acquisitions Tax (CAT) Deadline

Revenue has confirmed that the extended ROS Pay and File deadline is Wednesday, 17th November 2021.  This applies to ROS return filing and payment for self-assessment Income Tax and Capital Acquisitions Tax (CAT).  For taxpayers who don’t use ROS to file their tax return and pay their tax bill, the deadline remains 31st October 2021.

For self assessment Income Taxpayers who file their 2020 Form 11 Tax Return and make the appropriate payment through the Revenue Online System in relation to (i) Preliminary Tax for 2021 and/or (ii) the balance of Income Tax due for 2020, the filing date has been extended to Wednesday, 17th November 2021.

This extended deadline will also apply to CAT returns and appropriate payments made through ROS for beneficiaries who receive gifts and/or inheritances with valuation dates in the year ended 31st August 2021.

To qualify for the extension, taxpayers must pay and file through the ROS system. 

In situations where only one of these actions is completed through the Revenue Online System, the extension will not apply.  As a result,  both the submission of tax returns and relevant payments must be made on or before 31st October 2021.

The Revenue Commissioners have confirmed extended opening hours for the ROS Technical Helpdesk and Collector General’s Division in the days leading up to the ROS Pay and File deadline.

On 17th November (Pay & File Deadline) the phone lines of the ROS Technical Helpdesk will operate between 9am and midnight while those of the Collector General will operate from 9am until 8pm.

For further information, please click: https://www.revenue.ie/en/tax-professionals/ebrief/2021/no-0882021.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.

Proprietary and Non-proprietary Directors. Limited Companies Ireland. Income Tax Return. Company Payroll. Form 11 Tax Returns

There are two main types of director: a proprietary director who owns more than 15% of the share capital of the company and a non-proprietary director who owns less than 15% of the share capital of the company.  In general, a director is deemed to be a ‘chargeable person’ for Income Tax purposes.  This means that they are obliged to file an Income Tax Return (Form 11) every year even in situations where their entire income has already been taxed at source through the PAYE system (i.e. the company payroll).  Non-proprietary directors, however, as well as unpaid directors, are excluded from the obligation to file an annual income tax return.

A Proprietary Director must also comply with the self-assessment regime which means they have a requirement to make payments on account to meet their preliminary tax obligations. In situations where these payments are not made by the due date, the director is exposed to statutory interest at a rate of approximately 8% per annum.

A late surcharge applies in circumstances where the Director’s Income Tax Return is filed after the due date.  The surcharge is either (a) 5% where the tax return is delivered within two months of the filing date or (b) 10% where the tax return is not delivered within two months of the filing date. It is important to keep in mind that the surcharge will be calculated on the director’s income tax liability for the year of assessment before taking into account any PAYE deducted from their salary at source.  It should also be remembered that the Director can only claim a credit for the PAYE deducted if the company has in fact paid over this tax in full to Revenue.

Proprietary directors are not entitled to an Employee Tax Credit.  In general, this rule, subject to some exceptions, also applies in relation to a spouse or family member of a proprietary director who is in receipt of a salary from the company.  Proprietary Directors and their spouse and family members may, however, be entitled to the Earned Income Credit.

The director’s salary, just like any other employee’s salary, is an allowable deduction for the purposes of calculating Corporation Tax.

According to the Social Welfare and Pensions (Miscellaneous Provisions) Act 2013, a director with a 50% shareholding in the company will be insurable under Class S for PRSI purposes.  For proprietary directors with a shareholding of less than 50% of the company the PRSI treatment will be established on a case by case basis.

Where the director has a ‘controlling interest’ in the company, they will not be treated as ‘an employed contributor’ for PRSI purposes on any income or salary they receive from the company. Therefore, all amounts paid by the company to the director will be insurable under Class ‘S’ meaning that they will be treated as a self-employed contributor and liable to PRSI at 4%. Employers’ PRSI will not be applicable to their salary.

Where a Director is insured under Class A, PRSI is payable on their earnings at 4% and up to 10.75% Employer’s PRSI by the employer/company.

Even if you are not considered to be Irish resident by virtue of the 183 day rule or the “Look Back” rule, if you are in receipt of a salary from an Irish limited company you will be required to pay Income Tax to the Revenue Commissioners.  If, however, you are resident in a country with which Ireland has  a Double Taxation Agreement and your income is liable to tax in both countries, you should be able to claim relief on the tax you paid in Ireland.

For further information, please click: https://www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/payments-to-employees/directors.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.

Capital Gains Tax (CGT). Allowable Capital Losses. Form 11 Tax Returns. CG1 Returns. Revenue Guidance.

Revenue have confirmed in today’s guidance, ebrief No. 124/20, that there is no requirement for a person to include a capital loss in a tax return (Form 11 or Form CG1) for the chargeable period in which the loss arises in such circumstances where there is no chargeable gain, arising in the same chargeable period, against which it may be offset.

Revenue’s Tax and Duty manual Part 19-02-05, which deals with the treatment of allowable Capital Gains Tax (CGT) Losses, has been updated.

Paragraph 5.1 clarifies Revenue’s position that, where an allowable loss arises in a chargeable period and there is no chargeable gain arising in the same chargeable period against which it may be offset, then there is no obligation for a person to include the loss in a tax return for the chargeable period in which the loss arises.

For further information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-19/19-02-05.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.

Special Assignee Relief Programme (SARP). Income Tax Relief. Employee Tax Relief. Payroll Tax

There have been two updates to SARP legislation in the most recent Finance Act.  The Special Assignee Relief Programme is an Income Tax Relief aimed at employees who move to Ireland with their employer or with an associated company.  By way of background, SARP was first introduced in 2012. Where certain qualifying criteria are met, the assignee or secondee is entitled to a 30% deduction from employment income over €75,000.  Although this is an Income Tax Relief, the exemption does not extend to Universal Social Charge (USC) and PRSI.  SARP be claimed for five consecutive years in two way: (a) through an individual’s annual self assessment Income Tax Return or (b) through the employer’s payroll.

Revenue’s guidance on Special Assignee Relief Programme (SARP) has been updated to take into account the recent changes introduced by Finance Act 2018:

1. Details of the cap of €1 million introduced from 1st January 2019 for the years 2019 (for new entrants only) and 2020 (for all claimants).

A cap has been reintroduced on the amount of the employment income to which SARP relief can apply.

The upper income threshold of €1 million will apply to any relevant employee who first arrives in Ireland on or after 1st January 2019.

For the tax year 2020, the upper income threshold will apply to all relevant employees.

2. Clarification regarding the requirement to file Form SARP 1A within the 90 day time limit

From 1st January 2019 the time limit for the submission of the form SARP 1A will be extended from within 30 days of the date the employee first arrives in Ireland to carry out his/her employment duties to 90 days.

For further information, please click on the following link:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/special-assignee-relief-programme/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.

Retirement, Redundancy and Termination Payments. Income Tax. Employer Taxes. Payroll

If you are facing retirement or redundancy (termination of employment), it is important to understand the Income Tax treatment of your severance package. The following attract beneficial tax treatment through your employer’s payroll:

1. Statutory redundancy payments
2. Ex-gratia Termination payments
3. Pension lump sums

Statutory redundancy payments

Statutory redundancy payments are tax exempt.  They are based on two weeks’ pay for every year of service plus one additional week’s pay with maximum weekly earnings capped at €600 per week.  Income in excess of €31,200 is ignored when calculating Statutory redundancy payments.

Ex-gratia termination payment

Lump sum payments paid by an employer on retirement or redundancy may be taxable.

All or part of the ex gratia termination payment may qualify for tax relief.

The termination payment tax reliefs are not available, however, to any payments made to an employee under the terms of their employment contract. In other words, any contractual payments made by the company to its employee are treated in the same way as a salary payment.

Only complete years are counted for purposes of the reliefs i.e. part of a year cannot be taken into account for the purposes of the calculation.

There are three types of tax reliefs available:

1. Basic Exemption – This exemption is calculated as €10,160 plus €765 for each complete year of service.

2. Increased Basic Exemption – The Basic exemption may be increased by a further €10,000 less the current actuarial value of any tax free pension lump sum receivable now or in the future from the company/occupational pension scheme. This relief is available provided the employee hasn’t claimed an exemption in excess of the Basic Exemption within the previous ten years.

3. Standard Capital Superannuation Benefit (SCSB) relief – This Relief is based on the employees’ average annual remuneration for the last 36 months up to the date of termination.

The tax free amount is calculated as follows:

(A × B) − C

15

where

A = the average remuneration for the last 36 months of service up to the date of termination.  The value of any taxable benefits can be included in the figure for emoluments.

B = The number of complete years of service.

C = Any tax free lump sum received or receivable under the employer/occupational pension scheme.

There is a lifetime cap of €200,000 on the tax-free amount of a termination payment an employee is entitled to receive.

The amount of the termination payment in excess of the relevant exemption/relief is liable to Income Tax and Universal Social Charge at the employee’s marginal rates.

There is no employee and employer’s PRSI payable on a termination payment.

Before making any decision, please keep in mind that claiming either (i) the Increased Basic Exemption or (ii) the SCSB Relief can affect an employee’s ability to receive a tax-free lump sum from their employer pension scheme on retirement.

Pension Lump Sums

When you retire, you can opt to take a tax-free retirement lump sum which is capped at €200,000 under current legislation.

The amount between €200,001 and €500,000 is taxable at the standard rate of tax being 20%

Any amount over €500,000 is taxed under the Pay As You Earn system at the taxpayer’s marginal tax rate of 40%.

For further information on Termination Payments, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.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.