Today, the Minister for Finance, Jack Chambers T.D., and the Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D., announced the details Budget 2025.
As anticipated, Budget 2025 introduced several tax measures affecting individuals, families and households.
This article will focus on the tax measure introduced by Budget 2025, specifically under the Income Tax or Personal Tax heading.
Various amendments to the USC system were introduced in Budget 2025.
From 1st January 2025, the USC Rates and Bands will be:
Self-employed income over €100,000 will be liable to a 3% surcharge i.e. 11%
For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
The Income Tax Return filing deadline is 31st October 2024.
That deadline date is extended to 14th November 2024 provided you file both (a) your Income Tax Return and (b) your Income Tax Balance due for 2023 plus your 2024 Preliminary Tax.
When preparing your 2023 Income Tax Return, here are some Tax Reliefs you may not have considered before:
You could be entitled to the Childminder’s Tax Relief if:
No tax will be payable on the childminding earnings received, provided the amount is not more than €15,000 per annum.
As you cannot deduct any expenses, there is no requirement to maintain and keep detailed accounts.
If another person provides childcare services with you in your home, the €15,000 income limit is divided between you.
Despite the fact that you may have no Income Tax liability, you are obliged to file a Form 11 Tax Return by 31st October 2024 or 14th November 2024, whichever is relevant to you.
If, however, the childminding income exceeds the €15,000 annual threshold, the total amount will be taxed as normal under the self-assessment rules.
For further details, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-29.pdf
The Rent Tax Credit was introduced in Budget 2023 which is available for the tax years 2022 to 2025 inclusive.
In Budget 2024, the Rent Tax Credit was increased by €250.
When completing your 2023 Form 11 Tax Return the rent tax credit is worth a maximum of €500 per year from 2023 for a single individual and €1,000 for a married couple.
The rent tax credit is calculated as 20% of the rent paid in the year and is capped at €500 for a single person or €1,000 for a couple who are jointly assessed to tax.
When calculating your 2024 Preliminary Tax liability, the rent tax credit increases to €750 for a single individual and €1,500 for a married couple.
Please be aware that the claim must relate to rental payments which both (a) fell due and (b) were actually paid during the tax year of assessment.
This tax credit will only be available to taxpayers who are not in receipt of any other housing supports.
For further details, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-credit/index.aspx
Relief is available for fees between €317 and €1,270 paid in respect of Information Technology and Foreign Language courses which are on Revenue’s list of approved Courses.
To check the eligibility of your course, please click the following links:
These courses must be at least two years in duration and must not be a postgraduate course. Instead postgraduate courses in foreign languages or information technology may qualify for tuition fees relief. For further details, please click the following link: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx
This relief applies to fees if you are the student or if you have paid fees on behalf of another person.
For complete information, please click: https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/foreign-language-and-it-courses/index.aspx
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
As you’re aware, the Income Tax / self-assessment Tax Return filing deadline is 31st October 2024.
There is an extension to 14th November 2024 providing you file both (i) your 2023 Income Tax Return and (ii) the Income Tax Balance due for 2023 as well as your 2024 Preliminary Tax payments though ROS.
You should register for Income Tax self-assessment if:
You are obliged register for Income Tax purposes if
If you do not use ROS to file your Income Tax Return , the tax deadline remains 31st October 2024.
The Non-Resident Landlord Withholding Tax (NLWT) system came into operation on 1st July 2023.
Collection agents of non-resident landlords may opt to use the NLWT system.
The 2023 Form 11 Income Tax Return contains a new section that should be pre-populated, providing the gross rental income figure and the withholding tax which have been processed through the NLWT.
For further information, please click: https://www.revenue.ie/en/property/rental-income/nlwt/index.aspx
For complete information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-45/45-01-04.pdf
This credit was introduced for 2023 only.
This tax credit is for taxpayers who have made payments in respect of a qualifying loan for a principal private residence.
A new section has been added to 2023 Form 11 Tax Return for the purposes of claiming of the Mortgage Interest Tax Credit.
The relief is available to homeowners, who as of 31st December 2022, with an outstanding mortgage balance of between €80,000 and €500,000 and meet the necessary conditions.
For further information, please click: https https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/mortgage/index.aspx
For complete information, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-11B.pdf
If you fail to meet the October 31st Income Tax Return deadline, you could be liable to an interest charge for each day you’re late. Statutory Interest on the overdue tax liability is calculated at 0.0219% per day or part thereof.
This is in addition to a surcharge:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
On 24th December 2023, the EU Delegated Directive (2023/2775/EU) came into force which increased the total balance sheet and turnover thresholds for micro, small, medium and large companies, including groups, as set out in the Companies Act 2014 by approximately 25% to account for inflation.
E.U. member states have until 24th December 2024 to bring this legislation into effect.
Today, 19th June 2024, Minister for Enterprise, Trade and Employment, Peter Burke, TD signed into law the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024 (S.I. No. 301 of 2024) which comes into operation on 1st July 2024.
These size thresholds are contained in sections 280A to 280I of the Companies Act 2014.
Company size is typically determined by the company meeting two out of the three size criteria. Other relevant factors also apply.
These adjustments will result in more companies being categorised as micro or small which will, as a result, benefit from the abridgement and audit exemption. These changes are to apply to financial years commencing on or after 1st January 2024.
The increased size criteria/thresholds are as follows:
Please click for Regulations: https://www.irishstatutebook.ie/eli/2024/si/301/made/en/pdf
For associated articles, please click:
Annual Return for Companies – Ireland – Accounts Advice Centre
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
On 20th October 2023, the Supreme Court delivered its unanimous decision in The Revenue Commissioners v Karshan (Midlands) Ltd. t/a Domino’s Pizza [2023] IESC 24 (the “Karshan Case.” It was held that delivery drivers of Domino’s Pizza should be treated as employees and not independent contractors. Today Revenue published their “Guidelines for Determining Employment Status for Taxation purposes” which outlines a five step decision making framework to determine the employment status of individuals for tax purposes: eBrief No. 140/24
According to Revenue:
“Where an individual is engaged under a contract of service, i.e., as an employee taxable under Schedule E, income tax, USC and PRSI should be deducted from his or her employment income through their employer’s payroll system on or before when a payment is made.
Where an individual is engaged under a contract for service, i.e., as a self-employed individual taxable under Schedule D, he or she will generally be obliged to register for self-assessment, to pay preliminary tax and file their own income tax returns using the Revenue Online Service (ROS).”
The guidance material asks the following questions:
In other words, there must be an exchange of work for wage/remuneration before a working relationship can be categorised as a “contract for service.”
A contract is considered to be an engagement where there is a payment by the business to the individual regardless of whether or not there is a written contract in place.
This test distinguishes between a situation where a worker provides services to a business personally versus where it’s possible for that worker to engage others to provide the services on his/her/their behalf.
The court judgment placed a strong emphasis on the degree of freedom the individual has to decide how the work is carried out.
It is essential to establish the level of control the business has over the individual worker. For example, can it decide what the particular duties are, as well as how, when and where the work should be carried out?
Is the worker carrying on the business of the organisation he/she/they work(s) for or is this individual working on their own account?
In other words, to what degree is the worker/individual integrated into the business?
Apart from reviewing any written agreement in place, it is vital that the facts of the working arrangement are examined to establish if the individual is working for the business or is providing services on his/her/their own account.
If the answer to any of the first three questions set out above are “No”, a contract of employment is not deemed to exist and the individual should not be treated as an employee.
If, however, the answer to the first three questions is “Yes”, then questions 4 and 5 of the framework must be considered to determine if a contract of employment exists.
The Guidelines also include nineteen practical examples which demonstrate the application of the five step framework to assist in determining how workers, in a number of different situations, will be taxed.
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
As part of Budget 2024, the government signed off on a package of €257 million for the Increased Cost of Business (ICOB). The main aim of this Grant is to support small and medium sized businesses by contributing towards their rising business related costs including energy, labour, rent, etc.
To qualify for the ICOB grant your business must meet the following conditions:
The ICOB grant is a once-off payment based on the value of the 2023 commercial rates bill.
The grant is 50% of the commercial rates bill for eligible businesses with a 2023 bill of less than €10,000.
The grant is €5,000 for eligible businesses with a commercial rates bill of between €10,000 and €30,000.
Businesses, however, with a commercial rates bill over €30,000 are not eligible to receive this ICOB Grant.
Please be aware that Public institutions and financial institutions will not be eligible for the grant, except for Credit Unions and specific post office services.
Vacant properties will also not be eligible for the ICOB Grant.
It is important to keep in mind that this ICOB Grant is not a Commercial Rates waiver. Rateable businesses are still required to pay their commercial rates to their local authority.
Today, the Government issued two important updates concerning the Increase in Grant Scheme (ICOB):
Local Authorities are expected to begin paying out the ICOB Grant to eligible businesses in the coming weeks.
For further information, please follow the links:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
The Chancellor of the Exchequer, Jeremy Hunt delivered his UK Spring Budget 2024 today.
As you are aware, the Furnished Holiday Letting (FHL) regime provides tax relief for property owners letting out furnished properties as short term holiday accommodations. From 6th April 2025, however, the Chancellor is removing this tax incentive in an attempt to increase the availability of long term rental properties.
According to HMRC’s guidance material, a furnished holiday let is deemed to be a furnished commercial property which is situated in the United Kingdom.
It must be available to let for a minimum of 210 days in the year.
It must be commercially let as holiday accommodation for a minimum of 105 days in the year.
Guests must not occupy the property for 31 days or more, unless, something unforeseen happens such as the holidaymaker has a fall or accident or the flight is delayed.
You may wish to consider your options before the rules are abolished in April 2025.
Options include:
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
With effect from today, a new mandatory Capital Acquisitions Tax filing obligation is imposed on the recipients of certain loans from close relatives.
It applies to existing loans as well as new loans made since January 2024, irrespective of whether or not any gift or inheritance tax is due.
Until 31st December 2023, there was no requirement to file a Capital Acquisitions Tax Return in respect of this type of loan, until 80% of the recipient’s group class threshold had been exceeded.
The aim of this new requirement is to provide the Revenue Commissioners with greater visibility with regard to loans between close relatives in circumstances where the loans are either interest free or are provided for below market interest rates.
The individual is deemed to have received the benefit on 31st December each year which means the relevant return must be filed on or before 31st October of the following year. Therefore, the first mandatory filing date will be 31st October 2025.
A close relative of a person, includes persons in the CAT Group A or B thresholds, and is defined as follows:
There are certain “Look Through” provisions which must be applied to such loans. In other words, loans made to or by private companies will be “looked through” to determine if the loan is ultimately made by a close relative. Generally private companies are under the control of five or fewer persons. The holding of any shares in a private company is sufficient for these provisions to apply, including where the shares in the company are held via a Trust.
If someone receives an interest free loan of say €500k from a close relative’s company, the recipient of the loan would be deemed to take the loan from their close relative. As this exceeds the €335k threshold, this loan would be reportable.
These mandatory tax filing obligations apply in the following situations:
A mandatory filing obligation arises for the recipient of the loan where:
Whether or not a person exceeds the €335,000 threshold would need to be considered in relation to each calendar year.
A loan is deemed to be any loan, advance or form of credit. It need not necessarily be in writing.
All specified loans must be aggregated. Therefore, if a person has multiple loans from a number of different close relatives, the amount outstanding on each loan, in the relevant period, must be combined to determine if the threshold amount of €335,000 has been exceeded.
The first returns must be submitted by 31st October 2025 in respect of the calendar year ending 31 December 2024.
The CAT return must include the following information in relation to reportable loan balances:
For further information, please click: https://www.revenue.ie/en/gains-gifts-and-inheritance/filing-obligations/index.aspx
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Ireland has legislated for the Pillar Two rules with effect from:
The Pillar Two rules provide that income of large groups is taxed at a minimum effective tax rate of 15% on a jurisdictional basis.
These rules apply where the annual global turnover of the group exceeds €750m in two of the previous four fiscal years.
Ireland signed up to the OECD Two Pillar agreement in October 2021.
The new minimum tax rate, which is effective from the 1st of January 2024, sees an increase from the previous corporate tax rate of 12.5% to 15%, for certain large companies.
Ireland will continue to apply the 12½% corporation tax rate for businesses outside the scope of the agreement, i.e. businesses with revenues of less than €750 million.
There are special rules for intermediate parent entities and partially owned parent entities as well as certain exclusions.
It is understood that Revenue estimates approximately 1,600 multinational entity groups with a presence in Ireland will come in scope of Pillar 2.
In addition, the EU Minimum Tax Directive (2022/2523) provides the option for Member States to implement a Qualified Domestic Top-up Tax (QDMTT).
A domestic top-up tax, introduced in Ireland from 1st January 2024, allows the Irish Exchequer to collect any top-up tax due from domestic entities before the application of IIR or UTPR top up tax.
The QDTT paid in Ireland is creditable against any IIR or UTPR top up tax liability arising elsewhere within the group.
It is important to keep in mind that IIR or UTPR top up tax may not apply in relation to domestic entities in circumstances where the domestic top-up tax has been granted Safe Harbour status by the OECD.
As there will be separate pay and file obligations and standalone returns for IIR, UTPR and QDTT, Revenue guidance material will be provided, in due course, in relation to all administrative requirements.
For further information, please click: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2523
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.
Finance (No. 2) Act 2023 introduced a new Capital Gains Tax relief – “Relief for Investment in Innovative Enterprises.”
Its objective is to encourage investment in innovative small and medium start-up businesses entities.
This new relief provides a 16% CGT rate where a qualifying investor makes a qualifying investment in a qualifying company and subsequently disposes of those shares.
This new CGT Relief applies an effective rate of 16% on qualifying gains up to twice the value of their initial investment if the investment is made by an individual or 18% if the investment is made through a partnership. As you can see both rates are very attractive when compared to the standard 33% rate of Capital Gains Tax.
There is a lifetime limit of €3 million for the Relief.
The Relief, calculated as 33% – 17% for individuals or 33% – 15% for partnerships, is available on the lowest of the following:
Conditions for the Relief include the following:
The criteria governing certificates of qualification are provided for under s600F TCA 1997.
For the investor, a qualifying investment under the terms of the relief includes:
For the purposes of this Angel Investor Relief, the investor must not be “connected” with the investee company or any other company within the Relief Group. In other words, in order to claim this Relief, the investor cannot be a partner, director or employee of the relevant company or have any interest in the share capital of this or any company which is a member of the Relief Group. The investor must subscribe for shares in the investee company (i) for consideration wholly in cash, (ii) by way of a bargain at arm’s length and (ii) for bona fide commercial reasons.
IMPORTANT POINTS
Please be aware that the information contained in this article is of a general nature. It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.