Revenue

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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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Did you recently get married? It may pay to let Revenue know!

Once you are married, it may be worth contacting your local tax office to advise them, as you may be due a tax refund!

In the year of marriage, both partners are treated as single people, if the result of your assessment as single people is greater than the tax you would pay if you were assessed as a married couple, a refund of the difference is due to you.

This rebate usually occurs where a couple are taxed at difference tax rates and unused tax credits can be availed of by the other spouse.

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.

After the year of marriage review, you can opt to be treated as jointly assessed, separately assessed or as a single person. We would advise to get advice on what treatment suits your situation.

So, you want to be jointly assessed?

Joint assessment is the most beneficial for a married couple. Tax Credits, reliefs and rate bands can be allocated between you and you are assessed on your joint incomes. You will need to select the assessable spouse between you, which is usually the higher income earner. All filing of returns and payment of tax due is completed under the assessable spouse.

So, you want to separately assessed?

When you are separately assessed, both you and your partner are taxed as single people. Tax Credits, reliefs and rate bands can still be allocated between you, but you will both complete a single return. If eligible, the following tax credits are divided equally between you both;

  • Married or Civil Partner’s Tax Credit
  • Age Tax Credit
  • Blind Tax Credit
  • Incapacitated Child Tax Credit

So, you want to be assessed as a Single Person?

This is also known as separate treatment, where you and your partner are taxed and complete returns as single people. Tax Credits and standard rate band due as based on a single person. There is no option to transfer unused tax credits, reliefs or rate bands to your spouse or civil partner. Also, if you have children, you cannot claim Home Carer Tax Credit.

Under this treatment, if you do not use all of your personal tax credits, you may end up paying more tax as a couple than you would if jointly or separately assessed.

Need advice or a year of marriage review? Contact us on 01 539 7999 or log onto www.itasaccounting.ie and download our form.

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Flat Rate Expenses

Do you qualify for Flat Rate Expenses in relation to your profession?

Flat Rate Expenses are employment expenses claimable depending on the profession you are in.

To ensure you claim this entitlement if available to you,  check out Revenue’s list of qualifying professions here

It’s worth noting that the following professions have now been added for the years 2019 & 2020;

  • Dietitians
  • Medical Scientists
  • Phlebotomists
  • Social Workers
  • Speech & Language Therapists

The debate on Flat Rate Expenses has recently been in the news, and we have blogged about it! Catch up on all the recent news here

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PAYE Modernisation (P60 Replacement)

PAYE Modernisation

Since the start of 2019, your income and statutory deductions are submitted to Revenue each time you are paid.

Under PAYE Modernisation, employers no longer provide a Form P60. Instead, from January 2020 you will be able to view, download or print an Employment Detail Summary for 2019 under ‘Review your tax 2016−2019’ in the ‘PAYE Services’ on myAccount.

This Summary will contain your income and deductions details for 2019, as reported to Revenue by your employer. The information can be used in the same manner as the Form P60, for example, as proof of your income to a third party. To access your 2019 Summary of Income you must register for Revenue’s myAccount.

Using myAccount

To register for myAccount,

  • go to www.revenue.ie
  • click on ‘Register for myAccount’
  • Click on ‘Start Registration’

You will need your;

  • Personal Public Service Number (PPSN)
  • date of birth
  • phone number (mobile or landline)
  • email address
  • home address

Why not read more on PAYE Modernisation here

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