Employers Tax
Special Assignee Relief Programme (SARP)
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:
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.
Irish Employment Tax
It’s very difficult to keep up to date with all the amendments to the Irish tax system so here is a summary of some of the changes to be mindful of in 2018:
1. Annual Membership Fees paid to a professional body (Revenue eBrief 04/18 published on 9th January 2018)
https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0042018.aspx
The updated Revenue guidance notes allow an employee to claim a deduction for professional membership fees only in circumstances where:
- There is a statutory requirement for that employee to be a member of a specific professional organisation or body or to hold a practicing certificate in order to carry out the duties of his/her employment or
- In the absence of that professional membership or practicing certificate the individual cannot legally fulfill the full duties of his/her employment.
Where the employer pays the membership fee on the employee’s behalf and either of the above two conditions apply then no Benefit-in-Kind is deemed to have arisen. Subsequently no payroll taxes will arise.
We would advise all employers to ensure the payment of professional membership fees on behalf of employees can be supported in the event of a Revenue Audit.
2. Increase in Employer’s Pay Related Social Insurance from 10.75% to 10.85% from 1st January 2018.
3. Benefit-in-Kind Exemption of Electric Vehicles for 2018.
Finance Act 2017 introduced this exemption for electric vehicles which were available for private use for employees during the 2018 tax year. It is not clear whether or not this scheme will be extended into 2019 which may result in a low uptake in purchasing electric vehicles by employers.
The exemption applies to cars and vans deriving their power from an electric motor.
It does not apply to hybrid vehicles.
4. PAYE Modernisation or Real Time Reporting
From 1st January 2019 all employers will be required to accurately provide PAYE data to Revenue on a Real Time basis.
This effectively means:
- Revenue will be able to automatically review employees’ payroll information and immediately identify any discrepancies and errors.
- The PAYE information submitted to Revenue must be 100% correct. In other words, the opportunity to amend errors at the end of the year has been elimited.
For further information, please follow the link:
https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-892017.aspx
We would advise all employers to take the time, sooner rather than later, to ensure their payroll processes will be adequate to handle the increased obligations of the Real Time Reporting.
Here is a list of other relevant Revenue eBriefs:
Home Carer Tax Credit – Revenue eBrief No. 009/18 (29 January 2018) https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0092018.aspx
Change in Basis of Assessment – Schedule E – Revenue eBrief No. 127/17 (29 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1272017.aspx
Taxation of payments to craft apprentices by Education and Training Boards –Revenue eBrief No. 126/17 (29 December 2017)
Benefit-in-Kind on use of Company Vans – Revenue eBrief No. 124/17 (28th December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1242017.aspx
Exemption from Income Tax in respect of certain payments made under employment law – Revenue eBrief No. 118/17 (20 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1182017.aspx
PAYE Services: Tax and Duty Manual Updates – Revenue eBrief No. 111/17 (01 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1112017.aspx
Amendments to the Employment and Investment Incentive on 2nd November 2017 – Revenue eBrief No. 99/17 (02 November 2017)
https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-992017.aspx