May 2014
22
USC - Increase for medical card holders?
The removal of a ‘concession’ to medical card holders earning under €60,000 by which they did not have to pay the 7% rate of Universal Social Charge (USC) is scheduled to hit in January 2015. The move will affect full medical card holders earning more than €16,016 and less than €60,000. Currently full medical card holders with earnings under €60,000 are exempt from the 7% rate of USC; the 4% rate applies to all income over €10,036. It is estimated that this measure will affect approximately 360,000 taxpayers. On a salary of €40,000 the increase would be in excess of €700.
If the Government does not reconsider, this will coincide with the demands for the first Water Tax payment and comes shortly after the introduction of Local Property Tax (LPT). The Finance Minister Michael Noonan says that when the levy was implemented by Fianna Fail under the so-called sunset clause, the lower rate was set to expire in January 2015 but that does not mean it can’t be extended in the same way as the 9% rate of VAT was last year.
It has also been revealed that the 10% rate of USC for those self employed earning in excess of €100,000 will be reduced to 7% which is a significant cut for high earners.
Budget 2015 in October will reveal all!!!
Apr 2014
24
Taxation of Illness Benefit - Notification Letters
Illness Benefit & Occupational Injury Benefit paid by the Department of Social Protection (DSP) to PAYE workers is to be included by employers with taxable pay.
DSP notifies employers of the taxable amount of Illness/Occupational Benefit and of any changes to the amounts. In the past these notification letters have been posted to employers. With effect from 14th April 2014 DSP are using Revenue’s ROS Inbox facility to deliver notification letters directly to ROS registered employers. This change helps to ensure that employers are in a position to calculate the correct amount of tax payable.
Illness & Occupational Injury Benefit continue to be exempt from USC and PRSI.
All queries relating to the payments should be directed to DSP.
Full details regarding the taxation of Illness & Occupational Benefit can be found in The Employer’s Guide to PAYE.
Help on entering Illness/Occupational Injury Benefit can be found in the Online Help for Thesaurus Payroll Manager and BrightPay.
Mar 2014
12
Google Maps – Local Property Tax (LPT)
The Revenue Commissioners has announced a system for checking to see if people have deliberately undervalued their homes to reduce their Local Property Tax (LPT) below what they should be paying. Officials will use a system that is based on Google Street View and Google Maps to highlight properties where home owners have reduced the value significantly below their neighbours. "If we find properties like this we will look at it and see if we should challenge it," said Revenue's economist Keith Walsh.
Only officials working with Revenue will have access to the maps and the public will have no access. The maps will show the average value of homes sold on any street and the values other homes owners have attributed to their own properties. It will also show the identity of the homeowners, their PPS number and whether they have paid the LPT and household charge. "If people think they have undervalued they will have an opportunity to correct the value online," Mr. Walsh said. If property owners correct the value before 31st March 2014, they can avoid interest and penalties.
Revenue expects to write to people who have deliberately undervalued their home next month.
Feb 2014
28
Payroll Tip - February 2014
• The easiest way for employers to communicate with Revenue is via ROS (Revenue On-Line Service). If you are not already registered for ROS, information is available at http://www.ros.ie/PublisherServlet/info/setupnewcust. One benefit is that employers get extra time to file returns and make payments which can be beneficial.
• When a new employee starts employment, it is important that the employer registers them with Revenue as soon as possible.
• If it is the employee’s first employment in Ireland, you should ensure the employee has a PPSN (Personal Public Service Number). If the employee does not have a PPSN, the employee should apply for a PPSN through the Department of Social Protection. Once the PPSN is received, a Form 12A should be completed and sent to Revenue to apply for a Certificate of Tax Credits and Standard Rate Cut-Off Point.
• If a new employee gives you a P45 from a previous employer, you should register the employee by uploading the P45 Part 3 to ROS. The P45 Part 3 for uploading to ROS can be created using Thesaurus Payroll Manager or BrightPay.
• If a new employee hasn’t come from previous employment you should register the employee by uploading a P46 to ROS. The P46 for uploading to ROS can be created using Thesaurus Payroll Manager or BrightPay.
• If an employee has a second job, they should contact Revenue directly so that their allowances can be split between the two employments.
Feb 2014
5
Free business event for Irish SMEs - taking care of business
Very few things in life are free so why not avail of a free event to help your business. After a successful event in Dublin in October 2013, further events have been scheduled. If you own or manage a small business or are thinking of starting your own business you should visit www.takingcareofbusiness.ie to register as places are limited.
This is an initiative organized by the Department of Jobs, Enterprise & Innovation.
The events have been designed to help small and start-up businesses understand and benefit from the services provided by a range of State Bodies
Attendees will:
• Meet with representatives from a number of State Offices & Agencies
• Get information & advice on running your business
• Find out ways to save your business money
• Receive support to help you in your business
These half-day events will take place in March and April. They will be held in Limerick, Galway & Cork.
Full details including the agenda, dates and times can be found on the flyer
https://www.takingcareofbusiness.ie/TCOBRegionalFlyer2014.pdf
Jan 2014
28
Payroll Tax Tip – January 2014
Employers don’t miss your P35 deadline!!!!
The deadline for the 2013 P35 is 15th of February 2014. The extended date for ROS customers who pay & file on line is 23rd February 2014.
Important Points:
- All persons in your employment during the tax year, including those who left, must be included on the P35
- Where an employee’s PPS number is not known, it is important to include the employee’s address and date of birth
- Care should be taken to ensure PPS numbers are correct
- Only one entry should be made for each employee
There are severe penalties for failure to lodge end of year returns within the time provided. A delay in lodging the P35 return may cause employees unnecessary difficulty and delay when claiming Social Welfare benefits.
Form P60s
Between 1st of January and 15th of February, employers must give their employees a P60, showing Total Pay, Tax and PRSI contributions etc for the year ended 31st of December.
All employees in your employment on 31st of December should be provided with a P60. If an employee ceases employment on 31st December they should be given a form P45 and a form P60.
Revenue no longer issue P60 stationery, employers can print P60s for their employees from Thesaurus Payroll Manager/BrightPay onto blank stationery.
P35 FAQs can be found on Revenue’s website
Dec 2013
29
Payroll Tax Tip - December 2013
Tax Relief for Medical Expenses
Employees don’t forget to claim tax relief on medical expenses!!!!
Time Limit
A claim for tax relief must be made within 4 years after the end of the tax year to which the claim relates. Therefore to claim for 2009 you must submit your claim by the 31st of December 2013.
General Information
Tax Relief may be claimed in respect of certain medical expenses paid by you.
You cannot claim tax relief for any expenditure which:
- has been or will be reimbursed by another body such as VHI, Laya Healthcare, Hibernian Aviva Health, the Health Service Executive or any other body or person
- has been or will be the subject of a compensation payment
- relates to routine dental and ophthalmic care
You may claim relief in respect of any qualifying expenses paid by you in respect of any individual.
Tax Rate
Relief is allowed at the standard rate of tax (20%) with the exception of nursing home expenditure which is allowed at the higher tax rate (41%), if applicable.
Methods of Claiming
- online via Revenue’s PAYE Anytime Service
- completing Form Med 1 and submitting it to your local Revenue Office
- if you use a Form 11 to make a tax return enter the amount of health expenses claim at Panel 1
If the claim includes non routine dental expenses you must obtain a form Med 2, this must be signed and certified by the dental practitioner.
There is no need to send receipts backing up the claim but you need to retain all receipts for a period of 6 years as the claim may be selected for detailed examination in the future.
Full details can be found on Revenue’s website
http://www.revenue.ie/en/tax/it/leaflets/it6.html#section1
Nov 2013
19
Payroll Tax Tip - November 2013
PAYE Anytime – Benefits to employees
PAYE Anytime is the Irish Revenue On-Line Service for employees. This facility offers individuals who pay taxes under the PAYE system a method to manage their taxes online.
Registration
Registration is quick and easy, a PIN will be issued within 5 working days. Once the PIN has been received PAYE Anytime can be used immediately.
Once registered, you can
• View your tax record
• Claim a wide range of tax credits
• Apply for refunds of tax including health expenses
• Declare additional income
• Request a review of tax liability for previous years
• Re-allocate credits between yourself and your spouse
• Track your correspondence submitted to Revenue
Benefits
• PAYE Anytime gives secure access 24 hours a day, 365 days a year.
• Tax credits will be updated immediately
• Fast repayments
• Mobile phones can be used to track correspondence
Full details can be found on Revenue’s website
Oct 2013
31
October tax tip - Investing in a pension
The average life expectancy in Ireland is rising; people are living longer so it’s important to plan for your future. If a pension scheme or product is approved by the Revenue Commissioners you will receive Tax Relief on contributions to it. By contributing some of your salary to a Pension Scheme those earnings are not subject to PAYE. Tax Relief is allowed at the marginal rate of tax so if you pay tax at 41% you will get tax relief at 41% i.e. if you pay tax at 41% it will cost you €59 to contribute €100 to your pension.
AVC refers to any Additional Voluntary Contribution made to a Pension Scheme and would be worth considering for any bonus received to save paying 41% tax on it!
Pension contributions are subject to USC & PRSI.
The maximum allowable contributions for tax purposes are as follows:
Age % of Net Relevant Earnings
Under 30 years of age 15%
30-39 years of age 20%
40-49 years of age 25%
50-54 years of age 30%
55-59 years of age 35%
60 years of age & over 40%
It’s never too early to start a pension, think about it today. For help on processing pensions please refer to the online help file for Thesaurus Payroll Manager/BrightPay or telephone the support team who will be happy to assist you.
Oct 2013
16
2014 Payroll Software Budget Changes
Both Thesaurus Payroll Manager and BrightPay will refect the following changes in 2014.
Illness Benefit
The number of waiting days for Illness Benefit payable by the Department of Social Protection has been increased from 3 days to 6 days. Employees will not be entitled to Illness Benefit for the first 6 days of any period of illness; this will give rise to additional cost to employers who operate a sick pay scheme. Click here for more details.
Employer’s PRSI
The reduced rate of 4.25% Employer’s PRSI is due to revert to 8.5% from 1st January 2014. In July 2011 Employer’s PRSI for those earning less than €356 per week was halved, the rate will be restored to 8.5% from the 1st of January 2014.
Example: For an employee earning €350 per week the Employer’s PRSI is currently €14.88, from the 1st of January this will increase to €29.75
Local Property Tax (LPT)
A half year charge for LPT applied in 2013. From 2014 a full year’s charge will apply.
Benefit-in-Kind
The benefit-in-kind rate applicable to company motor vehicles will change from miles to kilometres with effect from 1st January 2014.
|
Business travel lower limit 2014 |
Business travel upper limit 2014 |
Percentage of original market value |
Business travel lower limit 2013 |
Business travel upper limit 2013 |
Percentage of original market value 2013 |
|
Kilometres |
Kilometres |
|
Kilometres |
Kilometres |
|
|
- |
24,000 |
30% |
- |
24,135 |
30% |
|
24,000 |
32,000 |
24% |
24,136 |
32,180 |
24% |
|
32,000 |
40,000 |
18% |
32,181 |
40,225 |
18% |
|
40,000 |
48,000 |
12% |
40,226 |
48,270 |
12% |
|
48,000 |
- |
6% |
48,271 |
- |
6% |
Pension Related Deduction (PRD)
Budget 2014 didn’t introduce any changes to the PRD rates or thresholds however, under current legislation the 5% rate, which applies to annual earnings between €15,000 and €20,000, will be reduced to 2.5% from 1st of January 2014.
