Library of Knowledge
Library of Knowledge No. 74
A welcome tax credit has been introduced on Mortgage Interest (where the interest increased from 2022 to 2023) and is available for taxpayers where:
- The property is the principal residence.
- The mortgage balance was between € 80,000 and € 500,000 at 31 December 2022.
- The qualifying loan remained in place in 2022 and 2023
- The interest on the qualifying loan increased from 2022 to 2023.
The amount qualifying for relief is capped at € 6,250 at the rate of 20%, based on the interest increase between 2022 + 2023.
The Mortgage Interest Tax credit is only available for the year 2023 and claimable via your 2023 income tax return.
It is also only available where the individual/jointly assessed couple have an actual tax liability.
Additional properties allowable:
The principal private residence of a dependent relative.
The residence of a spouse which they used to attend their employment.
Our annual income tax questionnaire for our income tax clients will include all necessary questions to ensure the credit is claimed wherever possible.
Please expect to receive your questionnaire in the coming month.
For further details see: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/mortgage/index.aspx
Library of Knowledge No. 73
On 5th February 2024 Revenue announced some good news for business’ still working their way through the impact of COVID.
The COVID debt warehouse scheme allowed business’ to pause payments of Revenue liabilities for VAT, PAYE, Income Tax, TWSS and EWSS from 2020 through to 2021 (peak COVID period).
Phase 3 (Period 3) of the Revenue COVID warehouse scheme requires that all liabilities are paid in full by 1st May 2024 or an agreed Revenue instalment arrangement with an interest rate of 3%.
The two options remain the same, however the interest rate is now reduced to 0%.
Revenue have confirmed a refund of interest charged for any business’ who have already entered into an agreement at 3%.
It is important to note that the deadline of 1st May 2024 remains unchanged to complete an instalment arrangement.
Note: To ensure the instalment arrangement stays in force, all current returns and liabilities must be lodged and paid by due dates.
For any business who requires any assistance, please do not hesitate to contact our office.
For further details see: https://www.revenue.ie/en/starting-a-business/paying-your-tax/debt-warehousing/amendments.aspx
Take care and have a good weekend.
Library of Knowledge No. 72
In challenging times, strategy is more important than ever. A strategy consultant can provide your business with unbiased insights to help you adapt to change, unearth new opportunities and develop a competitive advantage.
The Enterprise Ireland ‘Strategic Consultancy Grant’ can support the cost of hiring a strategic consultant to help with the development and/or implementation of strategic initiatives.
There are two types of grants available:
Strategic Consultancy Grant
For SMEs & Large companies Up to 50% of the costs incurred in hiring a consultant to a maximum grant amount of €35,000.
Strategic Consultancy Grant – Short Projects
For HPSUs, SME & Large companies
Projects of 3-10 days duration
Up to 80% of the costs incurred in hiring a consultant to a maximum grant amount of €7,200
Companies can avail of a maximum of three projects, addressing separate business challenges in any 12-month rolling period.
For further details see:
Library of Knowledge No. 71
Switching energy providers annually can offer several benefits to your business, the most important from a financial aspect is the significant cost saving factor.
It also enables your business to stay competitive in the marketplace.
By reviewing your energy contract annually, you can take advantage of new tariffs or promotions in the market, optimizing your energy savings.
The offers available also allow you to explore renewable energy options, aligning with sustainability goals and reducing the carbon footprint of your business.
Overall, annual switching empowers businesses to make informed decisions, drive down costs, and contribute to a greener future.
This energy review can be completed in house, however, there are also professional companies readily available to complete this service on your behalf. Examples of the can be found below:
Library of Knowledge No. 70
From 1st January 2024 workers will be entitled to up to 5 days of sick leave in a calendar year, (increased from 3 days in 2023) paid at 70% of gross earning, up to a cap of €110.
The employee must have 13 weeks continuous employment before being entitled to Statutory Sick Pay.
A GP certificate must be provided to the employer to qualify.
There are no ‘waiting days’ SSP is payable from the 1st day on illness once the GP certificate is provided.
Both full-time and part time employees can take 5 days paid sick leave.
If an employee has multiple jobs they are entitled to 5 days sick leave per employer.
The entitlement to paid sick leave is being phased in:
- 2024 – 5 days covered
- 2025 – 7 days covered
- 2026 – 10 days covered
For further details see: https://enterprise.gov.ie/en/news-and-events/department-news/2023/november/17112023.html
Library of Knowledge No. 69
Rent Tax Credit – claimable by tenants from 2022 to 2025.
2022 & 2023 Credit Claim
€ 500 for an individual
€ 1,000 for a couple who are jointly assessed for tax.
2024 – 2025 Credit Claim
€ 750 for an individual
€ 1,500 for a couple who are jointly assessed for tax.
If you pay rent, you may qualify for the Rent Tax Credit.
- If a number of tenants pay the rent for a property, each individual or couple can claim the Rent Tax Credit for the rent they pay.
- Not claimable if renting from a housing association or approved housing body, a local authority, your parent or your child.
The rent payments must be for a home that is in Ireland.
Details required, to claim the credit are:
- Landlords – Name, Address, PPS No., RTB No. (Residential Tenancy Board)
- Address of rental property plus LPT property no.
- Commencement date
- Amount of rent paid
The credit can be claimed via your MyAccount or your annual income tax return, if self employed.
You cannot claim for payments for:
- A security deposit
- Repairs or maintenance
- Board, laundry, utilities or other services
Rent Credit for ‘Dig’s while attending approved courses.
In due course (as announced in Budget 2024), parents will also be able to claim Rent Tax Credit for their children’s ‘digs’ rented to attend an approved course.
RTB registration is not essential in this case. When this change is introduced, it will also apply retrospectively for 2022 and 2023.
If your landlord prefers, they can give this information to Revenue directly through revenue myEnquiries. They should also give the Registered Tenancy number.
For more information, see: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/rent-credit/index.aspx
Library of Knowledge No. 68
The 2022 Finance Act outlined plans to introduce ‘Enhanced Reporting Requirements’ which comes into effect from the 1st January 2024.
What does ‘Enhanced Reporting Requirements’ mean?
From the 1st January 2024 Revenue require that specific reimbursed / tax free payments to employees (including Directors) be submitted via ROS (Revenue Online System) on or before the date of payment.
What expenses are to be submitted to Revenue?
There are three types of expenses to be reported:
Travel & Subsistence
Includes all reimbursements for business related costs: mileage, subsistence, travel costs, eating on site & country money (where vouched with a receipt or claimed via an expense claim form).
Details to be reported: Name, date of payment, expense type & amount.
Remote Working Daily Allowance
The daily amount of € 3.20, paid to an employee by the employer, tax free.
Details to be reported: Name, no. of days, date of payments, amount of payment.
Note: While the employer is not obliged to make this payment, it may be claimed through the Revenue MyAccount app.
However, this claim is not the standard € 3.20 per day. It is calculated based on days worked from home, cost of your expenses and the % claimable (currently 30%).
The annual maximum amount of € 1,000 paid to employees / directors via noncash benefits – gift cards, vouchers etc..
Note: Maximum per employee 2 x € 500 vouchers / cards.
Details to be reported: Name, date paid, voucher value.
Do I still need to maintain my claim forms?
Yes, absolutely. The claim forms and all vouched receipts should be maintained and held on file.
How is this data submitted?
Revenue are currently finalizing the manual system where the data can be uploaded to ROS. In addition, they are engaging with 3rd party payroll & HR providers who should be in a position to provide enhancements to their software which will upload directly to the Revenue system.
What actions should I take as an Employer?
Over the coming weeks, we will be in direct contact with our clients to set procedures in place based on the various expenses paid.
For other business owners / employers it is strongly recommended to reach out now to your payroll / HR provider for the solution that suits your business.
Note: This is phase 1 only. Phase 2 will be advised by Revenue later when we can provide further advice.
For further information, see: https://www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/reporting-jan-2024/index.aspx
If we can be of any assistance, or you have any queries, please feel free to contact our office.
Take care and have a good weekend.
Library of Knowledge No. 67
The measures announced earlier this week improves the opportunity for business to claim the Temporary Business Energy Support Scheme (TBESS.)
The scheme is also extended until the end of May 2023.
Improvements to Scheme
- The threshold for qualification will be cut from the current 50% increase in electricity or gas costs compared to the same period a year ago, to a 30% increase.
- The level of relief will also increase from 40% to 50% of eligible costs from March 1st.
Those changes will apply retrospectively from the start of last September 2022.
The payment will remain subject to a monthly limit, but that will also rise from the current €10,000 to €15,000 per month per trade or profession from next month.
We offer our assistance at a nominal cost to review and submit your claim. Contact our office for further information.
Your business can make a claim under the scheme if it:
- is tax compliant.
- carries on a Case I trade or Case II profession. …
- has experienced a significant increase of 30% or more in its electricity and/or natural gas average unit price.
For further information see: https://www.revenue.ie/en/starting-a-business/tbess/eligible-businesses.aspx
Library of Knowledge No. 66
Second Reduced VAT Rate of 9% extended, until 31ST August 2023
The ‘Second Reduced VAT Rate’ of 9% which was introduced initially for the period 1st November 2020 to 28th February 2023, is now extended to 31st August 2023.
The announcement was part of the package published by the government earlier this week to address the ongoing ‘cost of living’ issues.
All businesses who qualify should continue to charge 9% instead of 13½%, until 31st August 2023.
For the period from 1 November 2020 to 28 February 2023, the following items are subject to the second reduced rate of VAT.
- catering and restaurant supplies (excluding alcohol, soft drinks and bottled water)
- hot take-away food, and hot tea and coffee
- hotel lettings, for example, guesthouses, caravan parks or camping sites
- admissions to cinemas, theatres, certain musical performances, museums, art galleries or exhibitions
- amusement services of the kind normally supplied in fairgrounds or amusement parks
- admission to an open farm
- hairdressing services
- certain printed matter such as brochures, leaflets, catalogues or printed music (excluding books).
For further information see: https://www.revenue.ie/en/vat/vat-rates/what-are-vat-rates/second-reduced-rate-vat.aspx
Please do not hesitate to contact one of our team, should you have any queries.
Library of Knowledge Week 65
With the current economic climate still uncertain, The Revenue Commissioners announced that the current Covid Debt Warehousing Scheme has now been extended to the 30th April 2024.
This will come as a relief to many who by the 31st December ’22 would have been faced with either a substantial sum to repay or to enter into a Phased Payment Agreement.
The Debt Warehousing Scheme was introduced to provide support to businesses experiencing a downturn during the pandemic.
With this extension for businesses, it is important to remember:
- The importance in keeping all current returns and payments up to date. Note: Failure to file all returns will result in being removed from the scheme.
- Proactive engagement with Revenue for any business experiencing cashflow and or difficulties with a current liability.
- It is possible to enter into a Phased Payment arrangement with the reduced interest rate of 3%, a considerable difference from the general interest rate of 10%.
Failure to comply with the items above, the warehousing option will be removed resulting in:
- Liabilities become immediately payable.
- Subject to debt collection enforcement action
- Subject to interest rates of 8% or 10% per annum
- Tax Clearance Cert will be rescinded.
For further information see link: https://www.revenue.ie/en/starting-a-business/paying-your-tax/debt-warehousing/disclosure-of-additional-liabilities.aspx