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Pre-Budget 2020

Ever wondered what taxes are financing government coffers?

Source: Irish Tax Institute Pre-Budget 2020 Briefing Papers 2019

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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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