Royal Canal Financial Control Services

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Tax & Regulatory News

Update to PRSI Class S Benefits

We welcome the news that from the 27 March 2017, the Treatment Benefit Scheme has been extended to also cover self-employed people who pay Class S PRSI. You should contact the Department of Social Protection or your treatment provider to check your eligibility before proceeding with any treatment.

Under the Treatment Benefit Scheme, you may now qualify for:

  • Dental benefit
  • Optical benefit
  • Hearing aids

Any queries on this please do not hesitate to contact us.

Income Tax Returns 2014

27th April 2015

Ronan Duffy & Co. are currently completing personal income tax returns for the tax year 2014.

Revenue have announced that the online filing deadline is extended to 12th November 2015.

We also welcome new clients until 31st October 2015. 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 Ronan Duffy & Co. on 044 93 76 668 or use our contact form.

Budget 2013

5 December 2012

Personal Taxation
• 4% USC cap for those aged > 70 years or medical card holders has been abolished where income is greater than €60,000.
• Employee PRSI: Removal of weekly PRSI allowance from full rate and modified rate PRSI contributors (€127).
• Self employed PRSI: Increase in minimum contribution from €253 to €500 annually.
• PRSI on Unearned Income: To apply to PAYE workers from 2014 onwards.

Business Taxation
• Committed to 12.5% corporation tax rate.
• 3 Year Relief for Start-Up Companies: Relief is extended to allow unused relief from 1st 3 years to be carried forward for use in subsequent years (subject to maximum relief in relation to employers’ PRSI).
• Close company surcharge de minus limit has been increased from €635 to €2,000.

Relevant Contracts Tax
• No changes to note

Indirect Taxes
• VAT cash receipts threshold increased from €1 million to €1.25 million from 1 May 2013.
• Motor tax increases – From 1 January 2013 higher rates apply for all categories with the exception of electric vehicles, and CO2 band A0.

Stamp duty
• No changes to note

Carbon Tax
• Extended to solid fuels – rate of €10 per tonne from 1 May 2013, and €20 per tonne from 1 May 2014.

Capital Taxes from 5 December 2012 (midnight)
• Rate increased from 30% to 33% from midnight.

(Local) Property Tax
• Collection will commence on 1 July 2013, with a half year charge in 2013.
• Rate of 0.18% of market value for properties up to €1 million, rate of 0.25% to any excess value over €1m. Charges calculated at the midpoint of property bands of €50,000 increments.
• Three year exemption for first time buyers, or those buying new or previously unoccupied houses.
• Non principal private residence charge will cease on 31 December 2013.
• Deferral of property tax in some cases subject to 4% interest charge.
• Non payment may result in deduction at source (PAYE workers) or refusal of a tax clearance certificate (self employed).

Miscellaneous Provisions & Announcements
• Maternity benefit will be taxable from 1 July 2013, but not liable to universal social charge
• BIK on preferential home loans decreased from 5% to 4%, other loans rate increased from 12.5% to 13.5%.
• Tobacco excise increased by 10c on pack of 20, 50c per 25kg pouch of roll-your-own from midnight 5 December 2012.
• Licenced road hauliers diesel excise rebate will apply from 1 July 2013.
• DIRT rate increased from 30% to 33% from payments received from 1 January 2013.
• Respite Care Grant decreased from €1,700 to €1,375 per annum.
• Dual car registration for 2013 – prefix 131 for 1st 6 months, and 132 for 2nd 6 months. The objective is to create a two period sales peak each year to help stabilise the industry.
• Medical cards will be replaced with GP Only cards for those aged > 70 and with income of €600 – €700 for a single person, or €1,200 – €1,400 for a married couple.
• Drugs Payment Scheme (DPS) increased from €132 to €144 per month, with the prescription charge for medical card holders increased to €1.50.
• Child benefit rate to be reduced by €10 per month.
• Duration of Jobseekers payment to be reduced by 3 months.
• Extension of the Credit Review Office to provide more assistance to the SME sector.
• Simplification of charitable donations so charity now gets tax relief on all donations at blended rate of 30%.

Summary Statistics

Budget 2013 Budget 2012
Capital Gains Tax Rate 33% 30%
Capital Acquisitions Tax Rate 33% 30%
Income Tax Rates
Lower 20% 20%
Higher 41% 41%
DIRT Tax
33% (36% – where payments made less frequently than annually) 30% (33% – where payments made less frequently than annually)
Tax Credits
Single Person €1,650 €1,650
Married Couple €3,300 €3,300
PAYE Credit €1,650 €1,650
Rate Bands
Single/widowed €32,800 €32,800
Single/widowed with dependent children €36,800 €36,800
Married -one income earner €41,800 €41,800
Married – two income earners €65,600 €65,600
PRSI
Contribution Ceiling No limit No limit
Universal Social Charge
< €10,036 Exempt Exempt
€ 0 – €10,036 2% 2%
€10,037 – €16,016 4% 4%
>€16,016 7% 7%

Whilst every care has been taken in the production of this budget 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. For a more comprehensive summary please refer to the government press release.

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REMINDER Tax on Non Principal Private Residence

1st June 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.

Broadcasting Licences

The following are a list of the main licences and licence organisations that exist in retail (click on title for relevant external site):

Irish Music Rights Organisation Limited (IMRO)
An annual licence fee is payable to IMRO where music and other recorded material is broadcast in a public area including any work area. IMRO is a not-for-profit organisation which distributes the licence fee income among the performers, song writers and publishers.

Phonographic Performance Ireland (PPI)
A PPI licence is required where music and other recorded material is broadcast in a public area including any work area. This fee is payable to the producer of the broadcast, e.g. record company. An IMRO licence must normally be accompanied by a PPI licence except where there is no record company, e.g. concerts and pub performances.

TV Licence
Under the Broadcasting Act 2009 a television set is “any electronic apparatus capable of receiving and exhibiting television broadcasting services broadcast for general reception (whether or not its use for that purpose is dependent on the use of anything else in conjunction with it) and any software or assembly comprising such apparatus and other apparatus.”

National lottery commercial monitors/digital signs are exempt from the Broadcasting Act as they have no TV tuners installed. Franchisors in retail are introducing electronic advertising solutions where it is the responsibility of the retailer to purchase the equipment for the display. Care should be taken that a commercial monitor is purchased for this purpose in order to not fall foul of the requirement to purchase a TV licence.

Accelerated Capital Allowances – Energey Efficient Equipment

26 May 2012

Most equipment purchased can be written off for tax purposes over an eight year period, equivalent to a 12.5% allowance per annum. In order to promote energy efficient equipment, accelerated capital allowances allow 100% of the cost to be written off in the year of purchase.

In order to qualify for this allowance the equipment must be on the approved list on the Sustainable Energy Authority of Ireland website. More details are available here.

If you have purchased equipment which qualifies for accelerated capital allowances, please ensure you let us know so that we can claim the full 100% tax deduction in the year of purchase.

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.

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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

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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.

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USEFUL LINKS
Revenue RCT Index
Revenue – RCT Changes 2011
Revenue – Principal Contractors Page
Revenue – Subcontractors Page
Revenue – RCT New System FAQs

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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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