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Minimum Wage Increase 2020

As of 1st February, as set out in the National Minimum Wage Order 2020, Ireland’s minimum wage has increased to €10.10 per hour or part thereof, based on age of employee.

Source citizensinformation.ie

Calculating hourly rate

As stated in the National Minimum Wage Order 2020, the basic calculation is the gross pay is divided by the total number of hours worked.  Your Gross pay should include;

  • Shift premium
  • Bonus
  • Service Charge
  • Board (if applicable, 0.90c per hour worked)
  • Lodgings (if applicable, €23.86 per week or €3.42 per day)

As per the National Minimum Wage Order 2020, it must be clear what pay is taken into account, working hours and the period it covers. Hours worked should take into account overtime, travel (where this is part of the job) and training

The following do not count as pay and cannot be included when calculating the minimum wage;

  • Overtime premium
  • Call-out premium
  • Service pay (tips paid directly to you)
  • Unsocial hours premium
  • Tips which are placed in a central fund managed by the employer and paid as part of your wages
  • Premiums for working public holidays, Saturdays or Sundays
  • Allowances for special or additional duties
  • On-call or standby allowances
  • Certain payments you receive when absent from work, for example sick pay, holiday pay or pay during health and safety leave
  • Payment connected with leaving the employment, including on retirement
  • Contributions paid by the employer into any occupational pension scheme available to you
  • Redundancy payments
  • An advance payment of, for example, salary: the amount involved will be taken into account for the period when you would normally have received it
  • Payment in kind or benefit in kind, other than board or lodgings
  • Payment not connected with your employment
  • Compensation for injury or loss of tools
  • Award as part of a staff suggestion scheme
  • Loan by the employer to you

Entitlement

You are not entitled to the national minimum wage if;

  • Employed by a close relative (i.e spouse, parent) or
  • In a statutory apprenticeship or
  • Under 20 (this Act only guarantees you a reduced or sub-minimum rate of the national wage, as per table above)

While you are here; why not catch up on our other recent blogs

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Short Term Rental & Airbnb Review

Revenue have issued a review in regard to short term leasing from January 2020. Revenue have now defined that;

Income for providing short term accommodation for occasional visitors such as through an online accommodation booking system is not considered rental income (Case V) and is taxable as “other income” (Case IV) if occasional income or as “trading income” (Case I) if operated as a trade such as a guesthouse.

Therefore, in summary, Airbnb rentals and similar short-term rentals are no longer considered rental income and are to be declared as ‘other or trade income’.

What does this mean for my return?

Capital allowances (expenses subject to wear and tear) are not allowable against the profits of income under Case IV. However, expenses incurred to provide such accommodation are an allowable deduction such as ; commission fees, cleaning fees, reasonable cost of light and heat. Annual costs such as insurance, tv licence and general repairs and maintenance are no longer an allowable expense against profits under Case IV.

VAT

Now that this income is considered ‘other income’, You must register for VAT if your income is likely to exceed €37,500 per year. The VAT rate for short term accommodation is at a reduced rate of 9% and applies to;

  • Letting of a room(s) in a hotel or guesthouse.
  • Short term lettings of all or part of a house, apartment or similar building.
  • Letting of a part of a caravan park or similar place.
  • Letting of a part of a camping site or similar place.
  • Provision of any other holiday accommodation.

However, the provision of student accommodation is exempt from VAT.

A VAT registered business providing taxable short-term accommodation may reclaim Value-Added Tax (VAT) incurred on their business costs under the normal VAT rules.

Should you have any queries on this issue, please contact us on 01 5397999 or request our application here

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Home Renovation Incentive

The Home Renovation Incentive Scheme (HRI) was implemented in October 2013 and was originally available for homeowners to apply until 31st December 2015. Subsequently, the scheme was extended in December 2014 to include all homeowners, including landlords and finished in December 2018.

Home improvements carried out in 2019 were also included if planning permission was in place by 31st December 2018.

As the Home Renovation Incentive (HRI) scheme is now finished, we can now take a look at the figures behind this successful scheme.

The HRI scheme was a tax relief available to homeowners, for home improvements and repairs carried out in their property. To qualify, homeowners had to be

  • Taxed under PAYE or self-assessment
  • Local Property tax payments up to date and
  • Work carried out was by HRI qualifying contractors

Between 2013 – 2019, there were over €73,000 homeowners availing of the HRI relief on over 98,000 properties. The total value of these works totaled over €2.5billion with the average improvements valued at nearly €17,000.

You can check your own HRI claims, through MyAccount on the Revenue website.

While you’re here, why not catch up on our recent blogs here

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Pay & File Deadline Extension for Self-Assessed

The deadline for all self-assessed individuals to file their Form 11 tax return & submit payment has been extended, Revenue have announced.

Clients that file their 2019 Form 11 return and pay the following;

  • Preliminary Tax due for 2020
  • Income Tax Balance for 2019

Will qualify for the extended due date of Thursday, 12th November 2020.

As with every year, as it is an extremely busy period, we would advise all our clients that in order to give enough time to review your tax year and to submit it on time, paperwork must be submitted as soon as possible for 2019.

Your tax return can be filed at any time between now and the deadline.

Here are 5 reasons why you should file your Tax Return early this year…

  1. Plan Ahead

If you file your return and are due to pay a liability, this is due by 31st October (or the extension deadline as per above). Therefore, if you’re liability is calculated in advance, it gives you time to prepare and budget.

  1. Less Stress

Submitting your paperwork to your accountant early means there is less pressure on both sides to complete and file your return on time. Giving your accountant more time to prepare and review your return. If your paperwork is received late or too near the deadline, your accountant may not be able to guarantee filing it on time.

  1. Avoid Surcharges

If your return is filed after the deadline of 31st October (or the extension deadline as per above), you will be subject to surcharges and interest owed. You also run a higher risk of being selected for an audit.

  1. More efficient

The longer you leave your return nearer the deadline, the busier Revenue will be. If you are due a refund, the sooner you apply for this the better as you may need to wait a lot longer once we approach 31st October deadline due to the volumes of returns Revenue need to process.

  1. Peace of mind

Being more organised and submitting your return early, gives you that peace of mind that you have completed your tax obligations and won’t have that rush in October.

Contact us today to begin preparing your 2019 return on 01 539 7999 or info@itasaccounting.ie

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