Income Tax Returns 2011 – Online Filing Deadline 15th November 2012
26th April 2012
We are currently completing work on personal income tax returns for the tax year 2011.
We also welcome new clients until 31st October 2012. After this date, we do not feel sufficient time will be available to complete a full review of your tax affairs and prepare an accurate return on your behalf. To avail of this offer and for more details, please contact us on 044 93 76 668 or use our contact form.
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Tax on Non Principal Private Residence
1st March 2012
The Local Government (Charges) Act 2009 introduced a €200 annual charge on non principal private residences, payable by the owners to the local authority in whose area the property concerned is located. Liability for 2012 is assessed on the owner at 31st March 2012 (‘liability date’), with the due date of payment being 30th June.
There is no escape from the property tax:
• Revenue have access to ESB records and the Private Residential Tenancies Board records to compile a list of landlords assessable
•There is a fine for late payment of the tax – the charge increases by €20 monthly if not paid by 30th June. Unpaid 2009 charges have been accumulating at €20 monthly since 1st November 2009. In the event that you wish to sell your house at a later date, the purchaser will become liable to any outstanding levies on the house, and therefore may cause difficulties at this stage.
Payment can be made online or by cheque/draft/postal order.
To pay online click here
To download paper copy form (new customers) click here
To download paper copy form (renewals only) click here
For further information see the FAQ page here or feel free to give us a call.
Revenue Commissioners Target High Income Pensioners
6th January 2012
Revenue have been involved in an exchange of information exercise with the Department of Social Protection, which this week resulted in Revenue stating that 115,000 pensioners will pay extra tax in 2012. It is important to note that no change in tax law has occurred as a result of this initiative, rather due to technological advances the Revenue Commissioners are able to integrate information received from the Department of Social Protection into tax credit certificates from 2012.
It is important to distinguish between the self-assessed and the PAYE worker in this scenario.
Self-Assessed persons are obliged to complete an income tax return annually as they have significant non-PAYE income, e.g. trade or rental income. On an income tax return you are obliged to complete and have assessed all your income sources, not just your self-employed income. Therefore, you should be recording all your pension income on the form to ensure it is being taxed correctly.
PAYE Workers are not obliged to complete an income tax return each year as their income tax is deducted at source. For occupational pensions, the administrators of the fund are obliged to operate any pension payments through the payroll. However, in a lot of cases they would be issued with a tax deduction certificate for the recipient stating income up to €18,000 is tax exempt in 2011/2012 for a single individual, and up to €36,000 for a married couple.
Comparing this to the state pensions (Contributory Pension, Transitional Pension, Widows Pension, Invalidity Pension), these are liable to tax in the same way as occupational pensions, but due to the easing of the administrative burden, tax was never deducted at source on these pensions. An administrative burden would arise as the vast majority of such recipients would be under the threshold to be tax exempt, and therefore large refunds would be issued at the end of the tax year to repay the recipient for tax deducted at source. Such a position relies on the taxpayer being aware of whether their have any tax liability on their total income, and the need to inform the Revenue Commissioners of the amount of their state pension. The complexity of the tax system means that professional advice is often needed, not something which is often available to PAYE workers.
In order to ensure that the state pensions are appropriately taxed, the occupational pension administrators are advised of how much they must reduce the tax exempt limit of the recipient. Previously this was not done automatically by Revenue, which resulted in underpayments by certain tax payers. This is corrected for the tax year 2012 onwards, but arrears may be due for previous years in some cases.
Should you have any queries on this do not hesitate to contact us.
Increase in Standard VAT Rate – 1 January 2012
2 January 2012
We wish to remind you of the VAT rate change which is to be applied from 1st January 2012.
Budget 2012 increased the standard rate of VAT to 23% from January 2012. This increase applies to all goods and services liable to the standard rate including alcohol and non-alcoholic minerals, transport fuels, vehicles, consumer goods, hiring/leasing, confectionery as well as many services.
All VAT registered businesses should ensure that from 1 January 2012 all sales at the standard rate are charged to VAT at 23%. If you have a computerised sales system you may need to contact your IT support if you do not know how to amend the system. If you do not amend the VAT charged on your sales from 1 January 2012, the Revenue Commissioners are entitled to hold you liable to account for the additional VAT which should have been collected.
For ongoing contracts, the date of the invoice is the determinant of the VAT rate to be charged, where all invoices from 1 January 2012 should be charged at 23%. For further information for specific invoicing arrangements please see the Revenue website.
Please feel free to contact us with any queries you may have on this.
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Changes to RCT in 2012
Last Updated: 18th November 2011
If you are a Principal Contractor or a Sub Contractor please read the following very carefully.
We also encourage you to read all sections if you are a subcontractor only, so you can understand further how the changes affect you.
We will endeavour to update these notes as the new system comes live and if Revenue announces any changes, so please bookmark this page for future reference and check back and view the notes online to ensure you have our latest notes. You will note the change to the version by the date at the top of this document.
These notes are not intended to be comprehensive and are just provided as an overview of the main changes. The following notes are split into sections as follows (clink on section titles to jump to section)
Summary Highlights
Principal Contractor Notes
Subcontractor Notes
Useful Links
SUMMARY HIGHLIGHTS
As you are probably now aware Revenue is going online with all taxes as time goes on, RCT is the next on their list.
Revenue has published a video on youtube which they have on their website via the following link. It is broken down into different parts.
Revenue RCT Changes – Online Information Link
New eRCT System main highlights are as follows,
• No Paper forms at all
• No longer a C2 card
• Must be done online via ROS, no other option at all
• 3 rates of RCT 0%, 20% and 35%
• System will be live in part from 5th December 2011 to notify contracts only
• Full System will go live from 1st January 2012
• With new system you cannot make a payment to a subcontractor without notifying Revenue.
• ROS online and/or ROS offline to be used
• The following notifications must be supplied to Revenue via online
o Contract notification
o Payment Notification
o How much tax to deduct from sub-contractors payment instantly given
o Deduction Return Summary
Sectors affected:
• Construction
• Forestry
• Meat Processing
Why is Revenue making the change to online?
• Too much paper being used under current system, about 1 million pages per year at the moment
• Standard Rate too high at 35%
• Easier to complete monthly or quarterly returns compared to the old RCT30’s as Revenue will issue summary page with details already supplied.
• RCT35 form (annual return) will be gone as Revenue will now have all details of contracts
• Current Payment Cards gone
• Sub-Contractors will no longer receive the RCTDC page to claim the deducted tax back.
Subcontractors are not currently obliged to register for ROS, but if registered the advantage is that they can see what contracts are registered under their name.
For Agents there will be more work if clients are looking for their agent to act on their behalf for the principal.
PRINCIPAL CONTRACTOR NOTES
On ROS online the area will be on the bottom left of the screen
You can upload 10 contracts for each batch and an unlimited number of batches.
You can upload 100 payment notifications per batch and again you can upload unlimited number of batches.
You can also view previous payments and old contracts notified to Revenue via this screen.
Since there is no longer a C2 card it is the Principal Contractors’ responsibility to ensure that some official form of photo ID is kept, for example, drivers licence, passport etc.
Notify Revenue of the contract as soon as it is agreed as you will need to do this before you can request a payment authorisation from Revenue.
You will need the Subcontractor’s Tax Reference number; if you do not have this you tick a box on screen and it will require you to enter more contact details on the subcontractor. This will also happen if the number supplied by the subcontractor is incorrect. If this happens the rate that will be deducted is 35%
If this happens the principal must write to the subcontractor that there was an issue with the tax number supplied within 7 days from the start of the contract.
Revenue will also make contact with the subcontractor.
If a labour only contract further questions will be asked for example, materials, insurance etc., but the details required are the same as for the current RCT1 form.
On submission there will be instant acknowledgment of the contract.
No payment can be made unless contract notified to Revenue online.
You can amend details as follows after notification of contract to Revenue;- location, value and end date, all other changes must be notified to Revenue directly in writing.
If you have multiple invoices to pay you may only make one payment notification if you wish, while the new system is being introduced; it is proposed that this will change in the future.
You enter your gross payment amount – Gross ex VAT if construction or VAT exclusive for other industries.
There will be penalties if Revenue is not notified of payments before payment is made.
However, if ROS is down or there is a technical reason why you cannot notify Revenue in advance you must notify Revenue online of the payment as soon as possible afterwards, there will be a box to tick that it is a post payment. Revenue has said that they will monitor this button closely and penalties could be applied if no real reason for it to be used.
If you are making a payment and cannot notify Revenue per above online, you must use the rate given by Revenue at the time the contract is notified to Revenue, if not sure or not available you must use 35%.
Payment Authorisation Notification Number will be returned to your ROS inbox, it will tell you how much tax to deduct and what the net payment will be.
A copy of this authorisation must be given to subcontractor, or alternatively in email or writing but must be agreed in advance.
The tax you deduct will go over to the subcontractor’s tax record straight away and the subcontractor will see these online too (see below for more information on subcontractors)
If there is an error you can cancel the payment within the return period (i.e. within the RCT30 return period), however you can only change gross but anything else you must cancel the payment and start again.
The new Deduction Summary replaces the RCT30 forms.
This form will be prepopulated with the list of payments made within the return period line by line. The Principal must check these before payment to Revenue can be made, you can amend the line item as mentioned earlier however this must be done before the due date of the return.
If after the due date of the return you have to add a payment you cannot do this but will have to notify the tax office and penalties and surcharges and interest will be charged.
In summary the following penalties apply to the the new system, some of which are new as a result of the new system:
Section 530F – Payment without notification to Revenue
Section 530M – €100 surcharge for late or amended return
Section 1078 – Failure to deduct tax
Section 1052 – Interest and penalties on overdue tax
SUBCONTRATOR NOTES
As mentioned earlier there are 3 rates of RCT that can be deducted.
0% – Those who currently have a C2 or who are compliant for Tax
20% – Are for those who “Complied Substantially”
35% – Exceptional Circumstances, including where a contractor is “Unknown” per earlier, no tax number or tax number incorrect or where there are serious compliance issues i.e. taxes outstanding and or returns outstanding
For the first 3 months rates will be frozen until 1st April 2012.
Please note that there will be no more C2 cards.
Tax deducted will be on your RCT screen on ROS almost immediately after input by the principal; if the principal amends or cancels the payment/contract this will be updated on your record accordingly.
The tax deducted will only be available for offset against Corporation Tax or Income Tax if a sole trader and other tax liabilities during the year. Please remember that there will be no refunds during the year whatsoever.
Repayment will only occur after your own tax year, if you’re a company this will be our Corporation Tax year end or if a sole trader the calendar year end.
Your Corporation Tax return or Income Tax return will need to be filed before any refund can be processed. In addition you must have all of your current tax records up to date.
Finally – What do I need to do now?
1. Register for ROS, currently takes 10 days, if we act as your agent and have your ROS certificate; please speak to us to arrange for an additional certificate to be created or to send you the certificate.
2. Go online after 5th December 2011 to review what’s there.
3. Revenue will notify what rate you are on via ROS if registered or via post if not registered for ROS
4. View the online video when available from Revenue, link available at top of this page.
5. View the FAQ website, link below for more information
6. Ensure you register contracts leading up to 1st January 2012
If you have any questions or wish to discuss the new changes please feel free to contact Joe Bingham at 044 937 4915.
At Royal Canal Financial Control Service we can offer you onsite training and walk through when the system is live for you and your staff to better understand the new system, if you would like to enquire about this service offering please contact us for a quote.
Back to top
USEFUL LINKS
Revenue RCT Index
Revenue – RCT Changes 2011
Revenue – Principal Contractors Page
Revenue – Subcontractors Page
Revenue – RCT New System FAQs
Whilst every care has been taken in the production of this summary, neither Royal Canal Financial Control Services nor Ronan Duffy and Co. can be held responsible for any action taken or deferred, resulting from any errors contained therein.
Income Tax Returns 2010 – Online Filing Deadline 15th November 2011
15th October 2011
We are currently working hard to complete all income tax returns relating to 2010. This work is completed on a first come first served basis.
We also welcome new clients until 31st October 2011. After this date, we do not feel sufficient time will be available to complete a full review of your tax affairs and prepare an accurate return on your behalf. To avail of this offer and for more details, please contact us on 044 93 74 915 or use our contact form.
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Corporation Tax Exemption for New Start-Up Companies
Relief is available for new start up companies who are carrying on a new trade.
This is for new companies starting activity in 2011 and not trade that could be carried on in a current company or has been carried on in an old company.
The relief was available for all companies qualifying on their Corporation Tax payable in for the years 2009 and 2010 as per the Finance Act 2010. However there was a significant change in the Finance act 2011 which links the relief available to the amount of Employers PRSI paid in the year, capped at €5,000 per employee.
The following types of companies are not allowed to claim this relief as they cannot avail of de minimus State aid rules:
- Activities in the fishery and aquaculture sector,
- Primary production of agricultural products,
- Processing and marketing of agricultural products,
- Export-related activities,
- Activities in the coal sector,
- Road freight transport operations,
- Undertakings in difficulty
Please click here for the link to Revenue’s website which further outlines the above and contains some good working examples.
However, please do not hesitate to contact us should you wish to discuss further.
Finance Act (No. 3) 2011 [UPDATED]
27th July 2011
Today saw the signing by the President of the 3rd Finance Bill for 2011 into law, which provides equalisation of the tax treatment of same sex civil partnerships with those of married couples, and also offering some tax relief for transactions between co-habiting couples.
Revenue have published an e-brief in respect of same.
Full details of the bill are available on the Revenue website here.
There is also a useful FAQ section here.
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REMINDER: 1st July 2011 – VAT Rate Change/PRSI Reduction
20th June 2011
We wish to remind you of two important changes from the recent jobs initiative which are contained in the Finance Bill (No. 2) 2011. This Bill is currently at committee stage but the changes contained therein are expected to be implemented on 1st July as follows:
Reduced rate of VAT for certain catering and tourism related services
A reduced rate of 9% will apply to certain specific services in order to encourage more spending in these industries. Please click here for a useful leaflet from the Revenue Commissioners outlining which goods and services are chargeable at 9%, and which continue to be chargeable at 13.5%.
What you need to do now as a retailer?:
Ensure your sales system is updated at the close of business on 30th June to take account of the new VAT rate from 1st July. Where you do not update your sales system at this point and sell goods/services incorrectly at 13.5% then you will be liable to pay the full 13.5% VAT collected to the Revenue Commissioners.
As the objective of the VAT reduction is to increase the spending power of the final consumer, we recommend that the change of VAT rate on your sales system results in lower prices (the exception perhaps being meal deals etc. where we believe it is reasonable that a rounded price would remain). The hope would be that the retailer would benefit from increased turnover as a result of lower pricing. The last reduction in VAT in order to stimulate demand occurred in January 2001, however the reduction was reversed in March 2002 on the basis that the VAT reduction was not being passed onto the final consumer.
Reduced Employer’s PRSI on Jobs Which Pay Up To €356 Weekly
This typically refers to employees on PRSI Class AO/AX where you are currently liable to employer’s PRSI of 8.5% (€30.26 on a weekly wage of €356). This rate is being decreased to 4.25%, representing a saving of €15.13 for an employee paid €356 weekly.
What you need to do now as a retailer?:
If you are completing your own payroll on a computerised program you should ensure that you download the related upgrade prior to running your weekly payroll where the pay date occurs on or after 2nd July 2011.
Where we complete the payroll on your behalf the payroll calculations will be updated for pay periods occurring on or after 2nd July 2011.
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Mandatory Electronic Filing [UPDATED]
10th June 2011
It has come to our attention that from July 2011 the Revenue Commissioners no longer intend to issue paper receipts for tax payments made. ROS receipts will continue to be issued as normal.
As you may be aware Revenue have been phasing in the mandatory electronic filing of tax returns using the Revenue Online System (ROS) over the last few years. Phase 3 is currently being implemented and requires that from 1st June 2011 all company tax returns be filed online.
Where you are a company director that is currently completing paper returns (e.g. PAYE, VAT, RCT), and if you require any assistance with set-up and initial training on the ROS system, we would be happy to do this for you. Do not hesitate to contact us to avail of this offer. If you are a sole trader, the changes do not affect you unless you have more than 10 staff.
For further details please see the Revenue Website
