Jul 2013
29
2014 Budget date
The Minister for Finance, Michael Noonan, has confirmed that preparations have already commenced for Budget 2014. Delivery date of the Budget has been brought forward to Tuesday 15th October 2013.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
29
Local Property Tax - now a part of the Irish taxation landscape
LPT deductions at source (i.e. from payroll) became effective from 1st July 2013. The LPT deduction is advised to the employer by Revenue only and should not be implemented or amended under any other circumstances (e.g. by employee request).
The “Acorn to Oak Communications Plc -v- An Taoiseach, An Tánaiste and 48 Others” case was heard in the High Court last week and the case was dismissed. As far as we are aware, this ends the last legal challenge to the new tax.
Revenue will advise employers to make this deduction by the inclusion of an LPT field on the employee’s tax credit certificate issued to the employer (P2C). The deduction is only made in the circumstance that the employee has elected with Revenue to have the tax deducted from their salary or if Revenue are imposing the deduction, therefore employers will only make the deduction from some employees if not all.
Employers should not deviate from Revenue instructions. All employee queries relating to any LPT deduction or amendment should be directed to Revenue.
The latest versions of Thesaurus Payroll Manager (2013.2.0 upwards) automatically update employee records to implement LPT deductions, where applicable, once the latest P2Cs have been imported. All employee statements of earnings; Payslips, email payslips, P45, P60, will reflect LPT deductions made by employers on the employees behalf.
It is important that employers import the latest P2C file available to them from their ROS account in order to update employee details for such amendments.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
27
PAYROLL TAX TIP - JULY 2013
EMPLOYERS DID YOU KNOW YOU CAN PROVIDE YOUR EMPLOYEES WITH A SMALL BENEFIT TAX FREE?
Revenue Commissioner’s Approved Small Benefit Exemption Scheme:
Employers can provide employees with a small benefit (that is a benefit not exceeding €250); this small benefit is not subject to PAYE, USC or PRSI.
The following rules apply:
- The benefit cannot be cash, cash payments are fully taxable
- Only one such benefit can be given to an employee in one tax year
- Where a benefit exceeds €250 the full value of the benefit is subject to PAYE, USC & PRSI
The small benefit is traditionally given as a voucher, as mentioned above only one such benefit can be given to an employee in one tax year. If for example an employee receives a €150 voucher in January and a €100 voucher in June only the €150 January voucher will qualify for exemption and the €100 voucher given in June will be subject to PAYE, USC & PRSI.
Where a benefit exceeds the value of €250 the full value is subject to PAYE, USC & PRSI. For example if a €260 voucher is given to an employee the full value should be included on payroll as a benefit in kind and therefore subjected to PAYE, USC & PRSI.
Any changes to the scheme will be included in the help file within Thesaurus Payroll Manager and also on the online BrightPay help file http://www.brightpay.ie/docs/2013/benefit-in-kind/one-off-benefits/
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
26
Maternity Benefit and issues with P2Cs!
Maternity Benefit is taxable in Ireland since 1st July 2013, but remains exempt from PRSI and USC. Adoptive Benefit and Health and Safety Benefit are also taxable since 1st July 2013.
Revenue has advised that the employee’s tax credit certificate (P2C) will issue on the Week 1 basis when Revenue receives details of the payments from the DSP.
However it would seem that in some situations P2Cs have issued incorrectly on the cumulative basis. Employers should check before importing P2Cs from ROS to ensure that this does not occur. The impact from an employees point of view is that they would possibly end up owing money to revenue as the credits and SCOP would be lower that the original amounts put in at the beginning of the tax year and because the cert has been issued on a cumulative cert it would look for the extra tax as soon as the employee is due payment again . Its bad enough that women have to pay tax on their maternity payment without ending up with a tax bill in error aswell !
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
23
BrightPay supporting Barretstown
Congratulations to our BrightPay team members, Denise and Caroline, on their completion of the PowerFit spinathon in aid of Barretstown.
Thesaurus Software is a strong advocate of Barretstown who offer an invaluable service to society rebuilding the lives of seriously ill children and their families.
We at Thesaurus Software recognise the hard work of all charities and the current difficulties they face in meeting their challenges, to that end we offer all registered charities a free standard payroll software license and customer support on an ongoing basis. Click here for our terms and conditions.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
11
JobsPlus - New Irish Employer Incentive
JobsPlus is a new employer incentive which encourages employers to employ jobseekers on the live register. The scheme replaces the Revenue Job Assist and Employer Job (PRSI) Exemption Scheme from the 1st July 2013; the scheme will be operated by the Department of Social Protection.
There are two levels of payment:
- A payment of €7,500 over 2 years to the employer for each employee recruited who has been unemployed for between 12-24 months
- A payment of €10,000 over 2 years to the employer for each employee recruited who has been unemployed for more than 24 months
Payment will be made monthly in arrears by Electronic Fund Transfer over a 24 month period. Income received from the initiative will not be considered as revenue/income for income or corporation tax purposes.
To qualify for JobsPlus, employers must meet the following conditions:
- The employer must be registered for PAYE with the Revenue Commissioners
- The employer must be tax compliant, employers will be requested to give an officer of the Department of Social Protection permission to check their status with the Revenue Commissioners and to obtain a Tax Clearance Certificate using Revenue’s on line service at the time of application
- The employer must offer a full time position for a minimum of 30 hours per week and the employee must work at least 4 days in any 7 day period
- The employer must give details of the company when applying e.g. size of the workforce, bank details etc
To apply for the scheme employers log on to www.jobsplus.ie and complete the online application form, if approved the Department of Social Protection will revert to the employer via email.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
7
Classification of working directors
Up to now the classification for PRSI purposes, of directors of limited companies who work in that company (“proprietary directors”), has been determined on a case by case basis. This determination takes into consideration the Code of Practice for Determining the Employment or Self-employment Status of Individuals. (http://www.welfare.ie/en/Pages/Code-of-Practice-for-determining-Employment-or-Self-Employme.aspx )
Under the provisions of Section 16 of the Social Welfare and Pensions (Miscellaneous Provisions) Act 2013 proprietary directors who own or control 50% or more of the shareholding of the company, either directly or indirectly, cannot be an employee of that company. This provision comes into effect from 1 July 2013.
In these circumstances the individual is classified as self-employed and is liable to pay PRSI at Class S.
The classification of proprietary directors who own or control less than 50% of the shareholding of the company will continue to be determined on a case by case basis, taking into consideration the Code of Practice for Determining the Employment or Self-employment Status of Individuals.
The new provision will apply to proprietary directors both prospectively and retrospectively.
Where these provisions are to be applied retrospectively, a person has the option of electing to have the decision, in relation to his or her employment prior to the enactment of the legislation, made under the Code of Practice for Determining the Employment or Self-employment Status of Individuals. Any decision will only apply to the period of employment prior to the enactment of the legislation.
Bright Contracts – Employment contracts and handbooks
BrightPay – Payroll Software
Jul 2013
4
Maternity benefit tax could cost women up to €3,000
Mothers and pregnant women face losses of up to nearly €3,000 a year as part of the tax on maternity benefit which came into force on July 1st.
Women’s representatives said the measure was a mean-spirited move by the Government.
The tax will contribute €15m to the exchequer in 2013, and €40m per full year from then on.
But the National Women’s Council yesterday expressed concern that many women were not aware when the reductions in benefit would take affect.
Its policy advisor Ann Irwin explained: “It’s a very mean-spirited move in a lot of ways. Even the commission on taxation has said that maternity benefit should remain outside the tax net. It’s there for mothers to nurture children when outside the workforce.
“The benefit payments are an important acknowledgment for mothers of the cost of having a baby in Ireland.”
Opposition parties have branded the new tax measure as “anti-family” and it could see working mothers pay up to €2,700. Mothers will pay different rates depending on their top-up payments from their employer as well as assessments on their means.
The tax could see benefits reduced by up to €103 a week, the council said.
The Department of Social Protection paid out €309m in maternity benefit payments in 2011.
Mothers get between €217.80 and €260 a week in payments for 26 weeks.
The council said women who got employer top-up payments would be worst affected but that it remained unknown how many would be affected by the levy.
But ministers have insisted women overall will not be worse off. Some had been receiving high payments while on maternity leave, ministers have also said.
However, Ms Irwin said many women remained in the dark about the tax. “The first they may know about it while on leave is when their next pay package comes in.”
Bright Contracts – Employment Contracts and Handbooks
BrightPay – Payroll Software
Jun 2013
19
BrightPay 13.2, With Local Property Tax (LPT) Support, is Now Available
Local Property Tax (LPT) payroll deductions will become mandatory for applicable employees from 1st July 2013 onwards. Revenue have already started to issue updated P2Cs with LPT amounts.
You will need to upgrade to BrightPay version 13.2 to handle LPT payroll deductions. When you next launch BrightPay, the upgrade should be automatically detected – just follow the instructions on-screen. If you have any problems upgrading, please contact us.
BrightPay 13.2 Release Notes
Local Property Tax (LPT)
- Ability to import P2C files which contain total LPT amounts. Total LPT amounts can also be entered manually.
- LPT calculation and inclusion of LPT values on payslips and workings.
- P45 and P45 Part 3 updated to support LPT values (both ROS files and printable versions).
- P30 updated to support LPT values (on-screen, ROS files, and printable versions).
- Several LPT fields have been added to analysis.
- Ability to enter LPT year-to-date information in a mid-year employer setup.
Other features, improvements and bug fixes:
- Ability to print employee calendar.
- Ability to print annual leave entitlement calculation.
- Ability to enter previous employment figures for P46 employees (before, it was only possible for P45 Part 3 employees).
- Ability to import several new mid-year year-to-date values when importing employees from CSV.
- Fixed an issue in which an incorrect PRSI class is stated on the P45 for an employee who had one or more zero-pay payslips.
- Fixes an issue in which certain USC rates/bands and previous employment figures are not correctly imported from a P2C file.
- Fixes an issue in which incorrect year-to-date values are shown on the Tax Deduction Card of an employee who started during the tax year.
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll Software
Jun 2013
1
Taxation of Maternity Benefit, Adoptive Benefit & Health & Safety Benefit
From 1st July 2013 Maternity Benefit, Adoptive Benefit & Health & Safety Benefit payable by the Department of Social Protection will be taxable in full. These payments will be taxable but will not be subject to USC or PRSI.
The Revenue Commissioners have confirmed that employees in receipt of Maternity Benefit, Adoptive Benefit or Health & Safety Benefit will have their tax credit and standard rate cut-off point reduced to reflect the benefit they have received. As the benefit will be taxed by Revenue and not at source the recipients will continue to receive the same payment from the Department of Social Protection.
Employers will be advised of the adjusted tax credits and standard rate cut-off points on the tax credit certificates (P2C’s). As the benefit will be taxed by reducing the employee’s tax credits and standard rate cut-off point, employers are NOT to include figures for the benefit on Revenue forms i.e. P45, P60 or P35L.
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll Software
