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

Posted byAudrey MooneyinPayroll Software

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

http://www.revenue.ie/en/online/paye-anytime.html

Posted byAudrey MooneyinPayroll Software

Irish Maternity/Adoptive Leave Benefits

When an employee is on Maternity/Adoptive Leave and is receiving payment from the Department of Social Protection they will automatically receive a credited PRSI contribution for each week of leave.

If the employee has taken Maternity/Adoptive Leave but does not qualify for a payment from DSP they are still entitled to the credited PRSI contribution for each week of leave. The DSP has confirmed that if they receive a letter signed by the employer on the company headed paper which state the dates the employee was on Maternity/Adoptive Leave they will credit contributions to the employees PRSI record.

This will ensure that the employee’s entitlements to payments in the future from the DSP are protected.

Posted byGerri McGinleyinPayroll Software

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.

Posted byAudrey MooneyinPayroll Software

BrightPay shortlisted for AccountingWeb Software Satisfaction Awards

We are delighted to let you all know that we have been shortlisted by AccountingWeb for their Software Satisfaction Awards – Payroll Category. We would like to say a big thank you to all of our BrightPay customers that gave such positive feedback which has resulted in us being shortlisted. Customer satisfaction is paramount to us here in BrightPay. We will strive to ensure the highest level of customer satisfaction both in our product and service at all times.

The winners will be announced on the 7^th November so wish us luck!

http://www.accountingweb.co.uk/article/software-satisfaction-awards-shortlists-revealed/548792

Posted byCaroline MaloneinAwardsPayroll Software

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 1^st 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 1^st of January 2014. 

Example: For an employee earning €350 per week the Employer’s PRSI is currently €14.88, from the 1^st 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 1^st January 2014.

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 1^st of January 2014.

Posted byAudrey MooneyinPayroll Software

Budget 2014 - Overview (due to take effect from 1st Jan 2014 unless otherwise stated)

PAYE, USC & PRSI

• No change
• The reduced rate of 4.25% employer PRSI is due to revert back to 8.5% in January 2014

Maternity Benefit

• Maternity & Adoptive Benefit standardised at  €230 for new claimants from January 2014, existing claimants will not be affected

Illness Benefit

• Waiting days for entitlement to Illness Benefit increased from 3 days to 6 days

Medical Insurance

• Tax relief on medical insurance premiums restricted to  €1,000 per adult insured and  €500 per child insured from 16^th October 2013

Pension Contributions

• Tax relief on pension contributions limited to pensions of €60,000 or less

Top Slicing Relief

• Top slicing relief on ex-gratia termination & severance payments abolished

VAT

•  Reduced rate of 9% for the tourism sector to be retained

• All other VAT rates remain untouched

• VAT on cash receipts basis threshold increased to €2m with effect from 1^st  May 2014

GP Care

• Free GP care for all children under 5

Bereavement Grant

• One-off payment of €850 to the families of the deceased discontinued

DIRT Tax

• Increased from 33% to 41%

Prescription Charges

• Prescription charge increased from €1.50 per item to  €2.50 per item

Start Your Own Business Scheme

• 2 year income tax exemption for long term unemployed who start their own business subject to terms and conditions

SME’s Training & Mentoring Programme

• Subsidised financial training programme for small businesses consisting of 2 days dedicated offsite training

Corporation Tax

• Corporation Tax will remain at 12.5%

Medical Cards for the over 70s

• Income threshold for medical cards for over 70s lowered to  €900 per week for a couple and €500 per week for a single person, medical card in these cases would be replaced with GP only medical card

Telephone Allowance

• Pensioners telephone allowance worth €114 a year is being abolished

Air Travel Tax

• Reduced to 0% from 1^st April

Home Renovation Incentive

• An income tax credit to homeowners carrying out work on their home in the next 2 years, the credit will be calculated at 13.5% of the spending cost up to a maximum €4,050

Jobseekers Allowance

• Claimants aged 18-24 will receive a reduced rate of  €100 per week, claimants turning 25 from January will receive €144

Cigarettes

• Cigarette packets will be taxed 10 cent more from midnight 15^th October 2013

Wine

•  A 70cl bottle of wine will be taxed 50 cent more from midnight 15^th October 2013

Beer, Cider & Spirits

• Will rise in price by 10 cent from midnight 15^th October 2013

Motoring

• No increase in excise duty on petrol or diesel

No increase in motor tax

Posted byAudrey MooneyinPayroll Software

BUDGET 2014 – What To Expect?

It may be coming earlier this year, but the expectations are that the Budget won’t be as tough as those that have gone before it. While we won’t know for sure the full impact of this year’s “adjustment” until next Tuesday, it’s likely that – at first glance at least – the measures to be announced won’t cut as deeply as the austerity budgets that have preceded it.

The major tax revenue raising measure in this year’s exercise is likely to be one we are all already starting to come to terms with – Local Property Tax.

Introduced earlier this year, the tax, which is levied on the value of properties across the State, has already generated about €200 million. However, familiarity won’t ease the pain when the full year impact comes into effect in January and it’s still likely to cause some pain. Apart from that, the perception is now that people can’t simply afford to give up any more income. There is just no bite left to take from the apple.

Given the particularly onerous hit those on lower incomes have already taken, we’re unlikely to see any changes to either tax rates or bands. So, by and large, families may emerge from this budget with a similar amount in their take-home pay each month, couple with the recent announcement that children under 5 will receive free GP visits means this budget will be an easier one on the pocket for Irish people.

Higher earners, particularly those coming close to retirement, may be hit by the likely diminution in the maximum pension fund allowable for tax purposes.

Families with public sector employees are unlikely to see any specific measures aimed at them, given that a lot of their terms and conditions are being dealt with in the Haddington Road agreement.

Still, while the headlines might be thankfully free of major tax hikes next Tuesday, the Government is likely to look to raise additional tax revenues in a more insidious fashion.

As always any changes or updates to taxation rules will be catered for in the 2014 Thesaurus Payroll Manager and 2014 BrightPay.

Posted byAlan KellyinPayroll Software

LOCAL PROPERTY TAX (LPT) 2014

LPT 2013 (half year charge) is still quite topical but LPT 2014 (full year charge) is fast approaching!!!

The liability date for LPT 2014 is the 1^st November 2013 - if you own a residential property on the 1^st November 2013 you are liable for LPT 2014.

Key Dates for LPT 2014

• 1^st January – 31^st December 2014

Phased payments e.g. deduction at source from salary will continue

• 1^st January 2014

If paying in full by cash, payment must be made by 1^st January 2014

• 15^th January – 15^th December 2014 

Direct Debits will continue

• 21^st March 2014

Single Debit Authority payment deducted

Payment method for 2014:

If you paid your 2013 LPT liability by a phased payment method e.g. deduction at source, direct debit this payment method will automatically apply for 2014 and subsequent years.  There is no requirement to notify Revenue of your payment method for 2014 unless you wish to select a different payment method.

If you chose a different payment method in 2013 e.g. Credit/Debit Card, you must confirm your payment method for 2014 by:

• 7^th November 2013 (by paper)
• 27^th November 2013 (on-line)

In the case of Credit/Debit Card Payments, the full amount will be charged to the card on the day you select this payment method for paying your 2014 LPT liability.  This would mean the latest date for paying using this method would be the 27^th November 2013. 

Full details can be found on Revenue’s website

http://www.revenue.ie/en/tax/lpt/key-dates.html

Posted byAudrey MooneyinLPTPayroll Software

Making the Most of Tax Reliefs and Credits

There are a wide range of benefits that Irish taxpayers can claim for:

Medical Expenses: Tax relief granted at standard rate of 20%-   that’s €10 back for every €50 for doctors and consultants’ fees and prescribed medicines.  Relief can also be claimed for a number of other less obvious items, for example - the cost of special diabetic or celiac food products subject to a letter from your doctor. 

College Fees:  Tax relief is available on fees paid for qualifying third-level courses with the relief applied at a rate of 20% - excluding examination fees, registration fees and administration fees. The first €2,500 of any fees paid in 2013 do not qualify – effectively this means that tax relief will only be available for families with more than one child attending college.

Flat Rate Expenses: People working in certain occupations, such as nurses for example, are entitled to a fixed rate expense allowance to cover the costs of uniform.  Flat rate expenses can be deducted from your income before it is taxed.  For example nurses who are required to provide and launder their own uniforms are granted a deduction of €733 while shop assistants are entitled to a deduction of €121 and airline cabin crew are granted €64.00.

Disappearing Reliefs:  You have 4 years to make your tax relief claim.  This means the earliest year for which you can claim is 2009 even if the relief in question has been abolished.

Relief for Service Charges ceased from January 1   2012 but can still be claimed for 2009, 2010 and 2011. A maximum annual spend of €400 on domestic service charges, including waste, water and sewage is eligible for tax relief at 20%.

Relief on Trade Union subscriptions were abolished in 2011 however you can still claim back to 2009 up to a maximum of €350 per annum.

Rent Relief is to be abolished completely by 2018.

Posted byAnn TigheinPayroll Software