Tax & Regulatory News

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.

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.

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.

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

VAT Rate Change – Reduced Rate of 9%

18th May 2011

The Revenue Commissioners have included on their website a useful guide to the impending VAT rate change, including goods and services which will remain at the 13.5% rate.

The webpage is located here.

Government Jobs Initiative Announced

10th May 2011

The government today announced details of their jobs initiative. A summary of the main aspects are as follows:

• Air travel tax to be reduced to zero, subject to airlines’ agreement on increasing passenger numbers.
• Lower 9% VAT rate to apply mainly to restaurant & catering services, hotel and holiday accommodation, admission to certain public events, hairdressing, and printed materials such as newspapers and brochures. Effective period of 1 July 2011 to 31 December 2013.
• Halving of the lower rate of PRSI on jobs which pay up to €356 weekly.
• Additional expenditure on training, education and up-skilling placements.
• Increased funding of home energy efficient schemes, schools capital budget, smarter travel projects, to create additional employment.

The above to be funded by 0.6% levy on pension funds approved under Irish Tax Legislation for the period 2011 to 2015.

To read the full Jobs Initiative document from the RTE website please click here

A Finance Bill will be required in order to bring the above measures into law.

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. For a more comprehensive summary please refer to the government press release.

New rules for Voluntary Strike-Off

8th April 2011

We would like to remind you that there are new rules for applying for voluntary strike-off of companies from 1st May 2011. The new requirements are:

• Use of updated Form H15
• Share capital of the company cannot exceed €150 for the previous three years.
• Net assets/liabilities of the company cannot be greater than €150.

If you have a dormant company that you intend to strike-off which will not fulfill these conditions after 1st May 2011, now is the time to act. If you do not hold a letter of no objection from Revenue it may not be possible to strike-off the company under the old rules given the short time available.

Companies which do not meet the conditions for voluntary strike-off will either have to:

1. Go into liquidation and appoint a liquidator.
2. In a limited number of cases the company may be able to buy back its shares, subject to the three year holding period.

Professional advice should be sought before making any decision as each option will incurr varying costs depending on your individual circumstances.

Full details on voluntary strike-off under the new rules are available on the CRO website here.

Implications of Universal Social Charge

3rd January 2011

Budget 2011 combined the income levy and the health levy into the new universal social charge (USC). Whilst the overall exchequer return is estimated to be revenue neutral, it does involve bringing more employees into the tax net. The main features of the charge are:

* The only exemption for PAYE income is if the income is less than €77 a week.
* You may have to pay the USC even if you previously were not liable to the income levy (which had a weekly exemption threshold of €289).

Previously the following thresholds existed for exemption from each levy:

	Annual Income	Weekly Income
Income Levy	€15.028	€289
Health Levy	€26,000	€500
	.

The rates and thesholds for the universal social charge are as follows:

	Annual Income	Weekly Income
2%	€10,036	€193
4%	€10,037 – €16,016	€194 – €308
7%	> €16,016	> €308
	.

Therefore, an employee earning €200 a week will pay a USC of €4.14, calculated as follows:
[€193 x 2% + (€200 – €193) x 4%].

Related Articles
Budget 2011
Payroll 2011 Preparation

Payroll 2011 Preparation

17 December 2010

Indications from the Revenue Commissioners suggest that they are not sending out revised post-Budget 2011 tax credit certificates to employees. Advertisements in the local papers have requested that employees use PAYE Anytime to view their latest tax credit certificate or text Revenue for a paper copy should they so wish.

Details on how to text to receive a paper copy of your tax credit certificate are available on the Revenue Commissioners website by clicking here.

Meanwhile, employers are requested to defer running their first 2011 payroll as late as possible in order to ensure that tax is correctly calculated, and also to assist employees with their understanding of the new universal social charge. The notice to employers is available by clicking here.