Royal Canal Financial Control Services

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Budget 2016

13 October 2015

Last Updated (bold type): 13 October 2015

Please note that implementation dates for announced changes have been indicated below where available. Not all changes take immediate effect.

Personal Taxation
• Increase in home carer tax credit to €1,000, with an increase in the income limit to €7,200.
• PRSI relief for income in excess of €352 weekly, up to weekly income of €424. Reducing sliding scale of relief as income increases above €352, with maximum relief of €12.

Business Taxation & Regulation
• Earned Income credit of €550 for self-employed traders and professionals, along with directors who are not entitled to the PAYE tax credit.
• From 1st January 2016, the statutory minimum wages will be €9.15 per hour
• Increase in the threshold for paying higher rate employer’s PRSI from €356.01 to €376.01.
• 3 Year Relief for Start-Up Companies is being extended
• Supporting retailers by incentivising electronic payments (see Stamp Duty below)
• Maximum rate of commercial motor tax reduced from €5,195 to €900

Relevant Contracts Tax and Construction Industry
• The Home Renovation Incentive (HRI) Scheme is being extended until 31 December 2016.

Indirect Taxes
• The 9% VAT rate has been retained.

Stamp duty
• With effect from 1st January 2016, the current €2.50/€5.00 per annum charge on ATM cards/combined ATM & Debit Cards is being replaced with a 12c ATM withdrawal fee, but capped at €2.50/€5.00 per annum per card

Carbon Tax
• No changes to note.

Capital Taxes
• Capital Acquisition Tax: Tax free threshold which applies primarily to gifts and inheritances from parents to their children is being increased from €225,000 to €280,000

(Local) Property Tax
• 2016 property revaluations postponed until 2019

Miscellaneous Provisions & Announcements
• Increased duty on a packet of 20 cigarettes 50 cent, with a pro-rata increase in all other tobacco products.
• Paternity benefit scheme to be introduced from September 2016
• €5 increase in child benefit
• Extension of free Pre-School Year from age 3 until aged 5.5 years/start primary school
• Extension of free GP care to children under 12 years
• €3 weekly increase in pension rates
• Respite care grant €1,700 in 2016
• Social welfare Christmas bonus increased to 75%
• Pension fund levy to end in 2015

Summary Statistics

Budget 2016Budget 2015
Capital Gains Tax Rate33%33%
Capital Acquisitions Tax Rate33%33%
Income Tax Rates
41% (41% – where payments made less frequently than annually)41% (41% – 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
Earned Income Tax Credit€550€0
Rate Bands
Single/widowed with dependent children€37,800€37,800
Married -one income earner€42,800€42,800
Married – two income earners€67,600€67,600
Contribution CeilingNo limitNo limit
Universal Social Charge
< €13,000Exempt
< €12,012Exempt
€ 0 – €12,0121%1.5%
€12,013 – €18,6683%
€12,013 – €17,5763.5%
€18,669 – €70,0445.5%
€17,577 – €70,0447%
€70,045 – €100,0008%8%
Self employed income > €100,00011%11%
PAYE income in excess of €100,0008%8%
Age >70/medical card holders with income < €60,000 – Max rate3%3.5%

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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Employment Schemes & Employment Tax Schemes

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 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.

Jobs Plus
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.

Job Bridge
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.

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 2013Budget 2012
Capital Gains Tax Rate33%30%
Capital Acquisitions Tax Rate33%30%
Income Tax Rates
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 with dependent children€36,800€36,800
Married -one income earner€41,800€41,800
Married – two income earners€65,600€65,600
Contribution CeilingNo limitNo limit
Universal Social Charge
< €10,036ExemptExempt
€ 0 – €10,0362%2%
€10,037 – €16,0164%4%

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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Credit Card Terminal Error Scam – July 2012

12th July 2012

A scam similar to the tactics of the famous caller claiming there is a virus on your computer which they will help you sort if you give them access to your PC, such callers are also targeting retailers.

The scam artist will contact the store claiming they are a system engineer and that there is a problem with the terminal, which will disrupt service if not immediately rectified. The caller requests the retailer to key in a ‘dummy’ credit card number and process refunds to this card. When the process is finished the retailer is told everything is sorted and to dispose of the receipts.

Unfortunately the card is real, and the retailer becomes liable for the amount refunded especially if they have no receipt or card details.

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.

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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Budget 2012 – Public Expenditure Measures

5th December 2011

Minister for Public Expenditure & Reform, Brendan Howlin addressed the Dail today in relation to the expenditure budget for 2012.

The main points are as follows:

• Target deficit of 8.6% of GDP in 2012
• Public service pay bill to fall by €400m in 2012, with a 12% staff reduction
• No reduction in weekly rates of social welfare payments
• Basic child allowance rate to be maintained. Over the next two years however, they will standardise the rate payable per child, by reducing the allowance for additional children.
• Fuel allowance period to be reduced from 32 to 26 weeks.
• Employer’s redundancy rebate to be decreased by 60% to 15%
• Increase in the monthly threshold under the Drugs Payment Scheme (DPS) from €120 to €132
• Increase in €250 of the student contribution to third level fees
• Job seeker benefit to be assessed on a 5 day week were recepient is a part-time worker (currently based on 6 day week)

Budget 2012 continues with Minister Michael Noonan’s speech tomorrow at 3pm.

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