044 937 5962
26th August 2016
As you are probably aware, the Companies Act 2014 commenced on the 1st of June 2015. This was the single biggest piece of legislation enacted in the history of the state, and it represents a significant change for Irish Companies and Irish Company Directors.
One of the new requirements of the legislation is that companies incorporated prior to 1st June 2015 need to go through a conversion process. The vast majority of Irish companies limited by shares are expected to convert to New Private Limited Companies, the deadline of which is 30th November 2016. The Companies Registration Office (CRO) encourages us to file early as they cannot guarantee forms will be processed in time for the automatic conversion, therefore they have suggested a date of no later than 31st October 2016 for receipt of applications, with the conversion period then ending on 30th November 2016.
The time to decide is now!
It is widely known that there is a ‘do nothing’ option which will automatically convert a limited company to a New Private Limited Company after 30th November 2016. However, we do not recommend this avenue for the following reasons:
Our recommendation to convert to a New Private Limited Company is that you go through the shareholder driven conversion under S.59 of the 2014 Act. If you wish we can facilitate this process for you. This conversion needs to be completed by 30th of November 2016 but in order to draft the paperwork and submit the application on time we need you to confirm that you want assistance converting no later than 9th September 2016.
If you have any questions, or want to discuss how the new Companies Act 2014 impacts on you and your business, please feel free to give us a call. We would be delighted to assist you in any way that we can.
Last Updated: 6th July 2013
Please find below a list of the most relevant employment schemes and employment tax schemes. For further details please click on the scheme title, which will direct you to www.citizensinformation.ie or the government body responsible for the scheme, in order to ensure you are reading the most current regulations pertaining to each scheme.
Back to Work Enterprise Allowance (Self-Employed)
The Back to Work Enterprise Allowance (BTWEA) scheme encourages people getting certain social welfare payments to become self-employed.
Employee Retention Scheme
The purpose of this scheme is to encourage employers to keep on employees who get sick or injured which may impact on their ability to carry out their normal duties.
Community Employment Scheme
Designed to help people who are long-term unemployed and other disadvantaged people to get back to work by offering part-time and temporary placements in jobs based within local communities.
Provides cash incentives to employers to take on long term unemployed to fill job positions.
FAS Work Placement Scheme
Allows an employer take on a participant on work placement for a maximum of nine months, while the participant retains their social welfare entitlements.
Allows an employer take on an intern on work placement for a period of 6 – 9 months, while the participant retains their social welfare entitlements. Participant is also paid a weekly allowance of €50 by Social Welfare.
Pathways To Work
The strategy document of the government for a new approach to getting unemployed persons back to the work force, as part of the National Employment and Entitlements Service.
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)
Principal Contractor Notes
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
• 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
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
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.
This is a dymanic page – updates are towards the top of the page, general information towards the buttom.
If you want to check the latest JLC rates for retail grocery please click here to access the Labour Court website.
22 December 2011
Richard Bruton publishes the bill to reform the JLC/REA system. For a summary from the Department website please click here
13 October 2011
Following the ruling by the High Court over the summer that the JLC system is unconstitutional (Source: RTE Website), there has been much debate about the current power of the agreements.
Our opinion would be that for current employees there will be no change in the interim, unless specifically agreed with the employee. Previously, pay reduction agreements with employees would be unlawful even with employee agreement, for pay rates set below the JLC limits.
For new employees, the minimum wage of €8.65 should be adhered to. In the short term until the government reforms are brought into law, the national minimum wage may be more beneficial to the employer. However, it would be envisaged that the reforms would include a significant portion of the pay rates previously in force. An employer would also need to consider challenges from employees that are employed at a lower rate for doing the same job.
While the above is not to be interpreted as professional advice, it is food for thought on the practicalities that we currently work in. In any case the situation should become much clearer by the time the next JLC rate increase is due in January 2012.
27 July 2010
It has been announced that the increase in the JLC rate by 2.5% from 25 October 2010 has been deferred until 2011. It will be implemented in two phases of 1.25%, the first of which will be 1 January 2011 with the second to be implemented on 1 July 2011.
The table on the Labour Court website in the article below has not yet been updated.
Retail grocery pay rates are determined by the Labour Court by Employment Regulation Orders, confirmed proposals submitted by the Joint Labour Committee (JLC).
In order to ensure you are complying with the latest regulations we provide a direct link to the labour court website:
Retailed Grocery and Allied Trades – Statutory Minimum Rates of Remuneration
When you click on the above link you should see a PDF icon at the top of the page. When you click on this icon it will open the notice from the JLC confirming the latest rates. This must be posted up in your premises in a prominent location (e.g. staff canteen) so as to allow staff affected by it to be given a chance to read and fully understand the regulations.
Having determined the basic pay levels the following premiums and allowances are also payable:
Employees who work in excess of 8 hours per day or 39 hours per week, qualify for overtime rates (or time off in lieu by agreement). For overtime worked up to midnight from Monday to Saturday, employees are entitled to time-and-a-half and to double time from midnight to 7.00am. For Sunday overtime and work on a public holiday as overtime, employees are entitled to double time.
Sunday Work Hours
Premium of time-and-one-third for Sunday work as part of rostered hours.
Bank Holiday Hours
There are a number of different criteria applying to the level of bank holiday pay. Please see our reference document for further details.
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.
20 July 2010
We have updated our summary of bank fees and charges by the main Irish banks. Click on the file below for more information.
Note: For a full schedule of fees and charges per the latest publications by the main Irish banks, please see the links in the article below.
Do you regularly review their bank fees & charges for accuracy, e.g. lodgement fee charge consists of number of lodgements multiplied by the unit fee?
If you do review these to your actual lodgements and the agreed unit rate, do you find many errors and are these material?
From an accounts/audit perspective, variances year on year in the bank charges line are difficult to tie down, unless the movement is extreme or a quick review of the ledger reveals a couple of large entries which can be confirmed in detail. There is not necessarily any relationship between the balance sheet and the bank charges line. Your balance sheet may show cash in the bank, however there may have been a dip in cash resources during the year or your healthy cash balance relies on continuous outstanding lodgements which do not help you avoid overdraft fees. Therefore, you cannot draw any conclusions on the accuracy of bank charges by looking at your balance sheet.
Recalculation of bank charges is a time consuming process and therefore not one which would be viable for your accountant to carry out. The best place to start is to select a small number of entries and recalculate these, if you find errors then you’ll want to expand your testing. You need to make sure your have either your loan agreement or the current fees & charges guide for the relevant account. Note that many banks record on your bank statements on the date an interest rate changes.
If the bank has overcharged your account, then they will be liable to give you a refund of the amount of the overcharge.
If you need any assistance in recalculating your bank charges please do not hesitate to contact us. We would also be interested in hearing what you find out, you never know…
The National Employment Rights Authority (NERA) was established in February 2007 with the aim of securing compliance with employment legislation and fostering a culture of compliance.
As the recession hits, it may be tempting to make up your own employment rights. However, that is where NERA comes in and you may find yourself in the middle of a routine inspection visit. NERA have rights similar to the Revenue to:
The main areas that NERA will inspect are as follows:
1. Procedures for minimum pay are being followed
2. Proper rosters are drawn up and maintained for inspection, giving each employee their minimum rest periods and days off, maximum hours worked per week.
3. Holiday pay, bank holiday pay, Sunday pay entitlements.
4. Employees given basic terms and conditions of employment on commencement.
Further information can be obtained from NERAs website, www.employmentrights.ie, which is also a very useful site for obtaining information about employment law in general.
If you would like assistance from Royal Canal Financial Control Services in conducting an employment rights compliance review, please do not hesitate to contact us and we will be delighted issue you with a quote.
When it comes to taking money out of your corporate vehicle, not only will the Revenue Commissioners be interested to know that you are doing it within the confines of the tax law, the Office of the Director of Corporate Enforcement will be looking to see that company law is not being broken. Company law can be summarised as a protection for those which interact with the trading entity. This can include shareholders, employees, customers and suppliers. While you may consider yourself self-employed, under company law you are bound to operate your company in the interests of these different groups.
The Office of the Director of Corporate Enforcement (ODCE) is the watchdog for ensuring companies comply with company law. Especially in recessionary times, a company may find itself falling foul of company law in the following areas and being sanctioned by the ODCE:
1. Section 29 of the Companies Act, 1990 requires certain property transactions involving the directors to be approved in a shareholders’ meeting prior to the transaction taking place. If not done, the transaction may be void and the director may have to repay the company for any gain he later made on the disposal of the asset.
2. Section 31 of the Companies Act, 1990 prohibits the advancing of loans to directors or connected persons which are greater than 10% of the relevant net assets. The relevant net assets are the net assets per the balance sheet presented at the previous AGM (or share capital if no AGM). For companies with a shareholder deficit (excess of liabilities over assets), an outright ban would consequently exist.
This prohibition does not preclude a company from advancing expenses to a director (for foreign trips etc. where a time delay may exist until receipts are received by the company). The rules stipulate that such advances must be corrected within 6 months. One should ensure that where funds are being drawn down for expenses, that detailed summaries and receipts are maintained for such expenses.
Breaches of this section may be considered an indictable offence, with sanctions of 5 years imprisonment and fines of up to €12,697. In addition, where it is found that the directors acted recklessly leading to the winding up of an insolvent company, they may be found personally liable for all its debts.
With the downturn in the construction industry, the Health and Safety Authority are turning their attention to other businesses for their compliance reviews. One of the most basic things that all businesses need is a Health & Safety Statement. This should detail the particular hazards in the workplace and how they are managed. Even the smallest business, e.g. self-employed person working through a company from their own home is required to comply.
If you are a small company then you may be able to draw up your own compliance statement using the guidance from the Health & Safety Authority. Larger companies should engage the services of environmental compliance review experts.
The Safety, Health and Welfare at Work Act 2005 governs the duties of employers (trades persons, directors, senior managers etc.) and their employees regarding safety and health. While trivial breaches (such as having no safety statement) will result in an Improvement Notice and another visit from the Health & Safety Authority, serious breaches can result in fines of up to €3m or two years imprisonment.
The Revenue Commissioners released their annual report on Thursday 23 April 2009. Chairwoman Josephine Feehily said that they will be targeting cash businesses as a high risk of non-compliance occurs in these industries, e.g. security, pubs, barristers, retail units.
Depending on the degree and timescale of non-compliance, when interest and penalties are added your unpaid tax bill could be doubled.
Revenue is well aware of the economic downturn and is not interested in simply “making a difficult situation worse”. If you have difficulties paying your liabilities on time it is important to enter negotiations with Revenue rather than under-returning amounts. If you are selected for Revenue Audit, it is important not to panic. In some instances the audit may be part of a wider investigation of some of your suppliers or customers.
Having a proper system for recording all transactions with complete audit trail will make any possible Revenue investigation more straight forward and will make it easier to lend support to the completeness of your cash sales records.