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Target of €500m a year to be achieved from Local Property Tax

As reported in the Irish Times, 18.09.19, the Oireachtas Budgetary Oversight Committee has advised of potential options in overhauling how local property tax is charged and collected. The Oireachtas aim is to minimise charges when valuation increases and have suggested a central rate to achieve this.

In 2018, local authorities collected €470 million in Local Property Tax. The Oireachtas Committee has said the State should set a target of collecting €500 million a year.

Other options put forward include;

  • Local Authorities setting their own targets and rates for each location
  • Facility to defer payments if taxpayer’s income is below threshold of €15,000 or has declared insolvency

Committee chairman Colm Brophy said;

“The committee notes the importance of maintaining simplicity and transparency for taxpayers. Further, from an administrative perspective, a costly and complex system runs counterproductive to the objective of generating additional net revenue,” 

Read more on property tax here
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Revenue now communicating with Residential Tenancies Board on rental properties

The Residential Tenancies Board (RTB) have always shared information with Revenue, but this will be the first year Revenue have sought confirmation that a landlord has registered with them in order to claim tax relief on their mortgage interest paid.

As reported in the Irish Times on Friday 06.09.19, landlords will need to ensure they have registered their properties with the RTB before October 31st.

Revenue have also pre-populated this year’s Form 11 tax forms with rents shared by local authorities for those letting out properties through HAP.

Read more on this article click here

Why not also read our Rental Income including Airbnb blog here

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

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Surcharges on Late Returns for Directors

Revenue have recently updated their briefing on surcharges to apply to Directors returns.

Company directors and their spouses/civil partners, if jointly assessed, are obliged to file a self-assessment return every year. If a company director fails to file their annual return, a surcharge will be applied based on their income tax liability before credit for tax paid.

Certain directors are not required to file an annual income tax return such as;

  • Directors of Shelf Companies
  • Directors of dormant companies
  • Other temporary directorships in the period before the company commenced activity
  • Directors which during the 3 years ending on 05th April in the year of assessment;
    • was not entitled to any assets other than cash on hands, or a sum of money on deposit, not exceeding €130,
    • did not carry on a trade, business or other activity including the making of investments, and
    • did not pay charges on income within the meaning of section 243 TCA

Proprietary directors, where the director controls more than 15% of the shares of the company, is required to file a self-assessment return.

Non-Propietary directors do not need to file an annual return if;

  • all of their income, including fees, benefits, distributions, etc., is taxed through PAYE and
  • they would not be chargeable persons under self-assessment apart from being directors

However, a surcharge will apply if they;

  • are chargeable persons otherwise than by reference to their directorship and
  • are obliged to file a return of income and
  • the return is filed late

Why not read our previous blog regarding the legal and tax implications for Director’s loans here

Should you have any queries on this issue, please contact us on 01 5397999 or info@itasaccounting.ie

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Are you claiming the correct tax credits?

As reported in the Independent and various media outlets, over €4bn has been refunded by Revenue to taxpayers since 2010.

Tax Relief due on medical expenses, nursing home fees, etc have been claimed but this figure also includes overpayment of Income Tax. In our experience, taxpayers wrongly assume Revenue will inform them if they have overpaid in tax or their credits need to be amended but this is not the case.

Unless you request a P21 balancing statement from Revenue each year and ensure you are claiming the correct credits, you could be overpaying tax every year.

There are numerous tax reliefs available that taxpayers are not aware of and the Revenue have been called on to make people more aware of their entitlements. This is currently done in the UK through TV, Radio and Newspaper campaigns each year.

Only those who submit a claim with Revenue Commissioners will receive their portion of the overpaid taxes sitting on Revenue’s balance sheet. Once 4 years has passed this refund is no longer available. There is still a “fear factor” with Revenue where a lot of individuals are afraid to file a tax return in case they end up with a liability. This is very rarely the case, however if it does happen it is important that such an issue is addressed ASAP, as it could continue to occur going forward. And the aforementioned 4-year time limit, does not apply to Revenue.

“Sure I’m a PAYE worker, my tax is deducted at source”

This is a common response when we advise taxpayers of the importance in filing an annual tax return claim with Revenue. This is true, however over 80% of PAYE taxpayers overpay their taxes by on average €990 every year, and this is only of the people who actually do file returns.

There are usually 3 reasons why individuals overpay their taxes.

  1. Payroll Errors – yes, on the most part your tax is calculated correctly on payroll software. However, that software relies entirely on the information inputted by the payroll officer, who in turn relies on information from you, the Revenue Commissioners and the employer. With that much human input involved, you can see how human error could result in an over (or under) payment of Tax, USC or PRSI . It happens
  2. Incorrect Allocation of Allowances – whether you are a married couple or a single person with more than one source of income, you have certain rate bands and credits available to you with regards to Tax and USC. In order to ensure you do not overpay tax these allowances should be allocated according to the level of income between spouses and/or different sources of income, subject to Revenue limits. Where these allowances have not been reviewed regularly, more often than not they are allocated incorrectly, which is resulting in overpaid taxes.
  3. Claiming your Tax Credits – Revenue put the onus on the individual taxpayer to research, understand and ensure that they are claiming all their entitlements. Below are just some of the reasons why you might be missing out on tax refunds if you are not filing returns, there are many more:
  • Marital Status
  • Medical Expenses
  • Dependent Relatives
  • Tuition Fees
  • DIRT refunds
  • Age Credit
  • Home Renovation Incentive
  • Pension Contributions
  • Income Protection
  • Investment Incentives
  • Medical Insurance (BIK)
  • PRSI refunds once over 66
  • USC refunds for over 70’s

Contact us to request our Tax Return Application Form and we can review your taxes for the last 4 years

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