From 1st January 2024 employers will be required to report, collect and remit Income Tax, USC and PRSI, under the PAYE system, on any gains arising on the exercise, assignment or release of unapproved share options by employees and/or directors. From 1st January 2024, the tax collection method for share option gains will become a real-time payroll withholding obligation for the employer instead of the individual self-assessment system known as the Relevant Tax on Share Options (RTSO) system.
These new rules are a welcome development for employees and directors who, from 1st January 2024, will no longer be responsible for filing and submitting Income Tax, USC and PRSI arising on the exercise of their share options.
Employees may still, however, be required to file an Income Tax Return for a relevant tax year, if that individual remains a “chargeable person.”
The due date for such returns is 31st March 2024 and there are different returns required depending on the type of share scheme operated / share remuneration provided.
Penalties for failure to file Returns may apply.
The following Forms are required for the following share schemes:
In circumstances where employers have globally mobile employees working outside Ireland for part of the year, the gains arising on the exercise of the stock option may need to be apportioned based on the number of days those employees worked in Ireland during the grant to vest period. Employers will need to monitor the Irish workdays for these employees throughout the entire vesting period of the options. Employers will also need to determine whether the stock option gain is exempt from PRSI.
Consideration must be given as to how the tax liabilities will be funded, especially in situations where there is insufficient income to cover the payroll taxes, where the globally mobile employee is not subject to Irish tax at the date of exercise but a portion of the gain has given rise to an Irish tax liability or where the employee or director has ceased their employment with the organisation. For example, by introducing a “sell to cover” mechanism.
In Summary:
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.
Today, 10th October 2023, the Minister for Finance, Michael McGrath and Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe presented the 2024 Budget.
Budget 2024 tax measures feature a range of supports for individual and business taxpayers under the following headings:
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 Companies Registration Office (CRO), under Section 35 of The Companies Corporate Enforcement Act (2021), will require Company Directors to provide their personal public service numbers (PPSNs) when filing the following forms. This will be a mandatory requirement from Sunday, 11th June 2023:
Directors’ PPSNs will be required for validation purposes only. PPS numbers, RBO numbers and VINs will not be accessible on the public register.
The purpose of the new disclosure requirement is to reduce the risk of identity theft by introducing additional identity validation checks. This will affect individuals who may, wrongly, hold more than twenty five active directorships under different name variations.
It is important to note that non-compliance will constitute a Category 4 offence.
Please be aware that if the PPS Number does not match the PPS Number held by the Department of Employment and Social Protection, this may result in the submission being rejected. Therefore, to avoid any discrepancies and delays with filings, Directors should act now to make sure that the information held by the DEASP is consistent with that held by the CRO. It’s important to keep in mind that CRO rejections could lead to late filing penalties and delays in meeting annual return filing dates.
In circumstances, where a director does not have a PPS Number, but has been issued with an RBO number in connection with filings with the Central Register of Beneficial Ownership, this RBO number can be used for the relevant CRO filings.
In situations where a director does not have either a PPS number or an RBO transaction number, they must apply to the CRO for an “Identified Person Number” by means of a Form VIF i.e. Declaration as to Verification of Identity.
The VIF requires the name, address, date of birth and nationality of the individual. It must be declared as true by the director and verified by a notary.
For further information, please click the link below:
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 advice.
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.
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.
In 2016 the ‘New State Pension’ was introduced. As part of transitional arrangements to the new State Pension, taxpayers have been able to make voluntary contributions in relation to any incomplete years in their National Insurance record between April 2006 and April 2016.
Anyone who is retiring on or after 6th April 2016, under the ‘new State Pension’ rules, requires approximately thirty five qualifying years to claim the full state pension.
The U.K. government has extended the voluntary National Insurance contribution deadline from 5th April 2023 to 31st July 2023. This will allow taxpayers more time to fill gaps in their NI records to maximise the amount they will receive in State Pension.
Therefore, if you’re a man born after 5th April 1951 or a woman born after 5th April 1953 you have until 31st July 2023 to pay voluntary contributions to make up for gaps between tax years April 2006 and April 2016, providing you’re eligible.
Where there are gaps in an individual’s National Insurance record, voluntary NICs can be paid to be eligible for a higher State Pension or entitlement to other state benefits. Therefore, anyone with gaps in their National Insurance record from April 2006 onwards still has time to fill the gaps and increase their State Pension.
After 31st July 2023 you’ll only be able to pay for voluntary contributions for the past six years which may not be sufficient to qualify for a new State Pension if you have less than four qualifying years on your National Insurance record. Normally, you would require at least ten qualifying years in total.
Please be aware that any payments made will be at the lower 2022 to 2023 tax year rates. In other words, where the rates of voluntary National Insurance contributions were due to go to up from 6th April 2023, payments made by 31st July 2023 will be paid at the lower rate.
To look at your personal tax account to view your National Insurance record and obtain a state pension forecast, without charge, please click link: https://www.gov.uk/check-state-pension
The Future Pension Centre can tell you if paying for extra national insurance years will increase your state pension entitlement. For full details, please click: https://www.gov.uk/future-pension-centre
Based on the information you receive from HMRC, if you have returned to Ireland and you decide to top up your pension contributions before the deadline date, please find link to Application Form: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1102905/CF83.pdf
Please click for full HMRC guidance material which may be relevant to you if you have returned from working in the UK: https://www.gov.uk/government/publications/social-security-abroad-ni38/guidance-on-social-security-abroad-ni38#deciding-whether-to-pay-voluntary-national-insurance-contributions
The ability to buy back years by looking back to 2006 is scheduled to end on 31st July 2023. After the cut-off date, it will only be possible to pay for gaps in your National Insurance record by looking at the past six years. This means that you could lose out on the opportunity to maximise your UK State Pension for gap years before 2017.
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.
From 10th February 2023 the Revenue Commissioners are posting out letters to taxpayers who are currently registered for Income Tax but who have not submitted Income Tax Returns for years of assessment up to and including 2021.
The letters state:
“Based on a review of your Income Tax records, you have not filed any self-assessed Income Tax returns for years up to and including 2021.”
Taxpayers should start receiving such letters from 13th February onwards.
Please be aware that your Tax Agent won’t receive a copy of this notice.
In the event that the taxpayer is no longer deemed to be a “chargeable person” and, therefore, is no longer required to file an Income Tax Returns, he/she/they should cancel the Income Tax registration.
The term “chargeable person” applies to an individual who:
An individual who is in receipt of PAYE income as well as non-PAYE income will not, however, be regarded as a “chargeable person” provided:
A chargeable person is obliged to file an annual Income Tax Return through the self-assessment system.
This can be done online via ROS or by completing a Form TRCN1 which is available on the Revenue website.
If the taxpayer is considered a “chargeable person” but has not filed Income Tax Returns up to 2021, the letter is deemed to be a Final Reminder to file all outstanding income tax returns.
If the taxpayer does not file the outstanding Income Tax Returns or cancel the registration within 21 days of the letter, Revenue will cease the income tax registration without further notice.
Once the Income Tax registration is ceased, if the taxpayer wishes to re-register for income tax he/she/they will be required to submit an online application via ROS.
The Notice states:
“You should note that, where further information comes to Revenue’s attention that you were a chargeable person for any relevant tax year, Revenue reserves the right to reinstate your Income Tax registration.
The non-filing of a required tax return by chargeable persons can result in further contact from Revenue, including a follow-up compliance intervention. Non-filing of a return where required is also an offence for which a person can be prosecuted.”
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 Special Assignee Relief Programme (“SARP”) was introduced on 1st January 2012 to provide Income Tax Relief for eligible employees assigned to work in Ireland from abroad. It was due to expire for new entrants on 31st December 2022, however, Finance Act 2022 extended the relief for a further three years, up until 31st December 2025.
Prior to 1st January 2023, an individual was required to earn a minimum basic salary of €75,000 per annum (excluding all bonuses, benefits or share based remuneration) in order to be eligible for SARP.
From 1st January 2023 onwards the employee must have a minimum base salary of €100,000 per annum. This amount excludes all bonuses, commissions or other similar payments, benefits or share-based remuneration.
A number of conditions need to be satisfied for this relief to apply, as follows:
Example
Mark arrived in Ireland from USA on 17th October 2019 on a 5-year contract.
He was not Irish tax resident in 2019.
As Mark was tax resident in Ireland in 2020, he was entitled to claim relief under SARP.
His first year of claim was, therefore, 2020.
He can continue to claim SARP up to and including 2025 if he continues to satisfy the relevant conditions for the Relief.
The relief operates by:
Relief is not extended to Universal Social Charge (USC) so the individual must pay USC on the full amount of his/her/their salary.
The specified amount is not exempt from PRSI, unless the employee is relieved from paying Irish PRSI under either an EU Regulation or under a bilateral agreement with another jurisdiction.
The relief operates by providing a deduction for income tax purposes from remuneration based on the following formula:
(A-B) X 30%
A = Qualifying Remuneration i.e. total remuneration. This includes:
B = €100,000 (prior to 1st January 2023 it was €75,000)
Example:
Thomas arrived in Ireland on 1st January 2023 and meets all the above conditions to qualify for SARP relief.
His salary is €120,000, his bonus is €15,000 and he receives a benefits in kind (e.g. medical insurance) valued at €3,000.
A = €138,000 i.e. €120,000 + €15,000 + €3,000
B = €100,000 i.e. qualifying Income Threshold
SARP Deduction = (€138,000 – €100,000) = €38,000 @ 30% = €11,400
Thomas’s marginal Income Tax rate in Ireland is 40%, therefore his Income Tax saving is €4,560 i.e. €11,400 x 40%
It’s important to keep in mind that 8% USC and 4% PRSI, if applicable, will apply to this employment income.
SARP relief can be claimed by the employee in one of two ways:
An employee who receives SARP Relief is considered to be a “chargeable person” for Income Tax purposes. He/she/they is/are required to submit an Income Tax Return to the Irish Revenue Commissioners in respect of each year for which relief is claimed. The Form 11 Tax Return may be filed by way of a paper form or through the Revenue’s On-Line Service (ROS).
Employees who have registered and qualify for SARP must file a Form 11 Tax Return by 31st October following the end of the tax year.
By completing Part C of Form SARP 1A and submitting it to Revenue, SARP Relief can be granted at source through the employee’s payroll.
The employer is required to make this application only once.
Relief can be granted at source through payroll for the duration of the assignment, up to a maximum of five years, providing the employee continues to satisfy all the relevant conditions.
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.
Today the Irish Revenue Commissioners published eBrief No. 197/22 in relation to emergency accommodation and ancillary services. For full information, please click: https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Services/services-emergency-accommodation-and-ancillary-services.pdf
If you are providing Emergency Accommodation it is essential for you to consider the VAT implications.
The most important points are as follows:
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 publication of Draft Residential Zoned Land Tax Maps by local authorities was announced today by the Minister for Finance, Paschal Donohoe T.D. and the Minister for Housing, Local Government and Heritage, Darragh O’Brien T.D.
Landowners have until 1st January 2023 to make a submission to the relevant local authority as to whether or not their land, on the map, satisfies the criteria to be liable to the tax.
This is part of the implementation of the Residential Zoned Land Tax (RZLT).
What is RZLT?
As you may remember, Residential Zoned Land Tax (RZLT) was introduced by Finance Act 2021 as part of the Government’s ‘Housing for All – a New Housing Plan for Ireland’.
Land within the scope of RZLT will be liable to an annual 3% tax based on its market value from 1st January 2024 onwards.
RZLT will apply to land that on, or after, 1st January 2022, is:
In other words, where the land is zoned as suitable for residential development and serviced after 1st January 2022, tax will be first due in the third year after it comes within scope.
The primary objective of RZLT is activate land for residential development and not to increase the Government’s tax revenue.
It will operate on a self-assessment basis, which places the filing and payments obligations on the landowners. You must retain detailed records to enable the Revenue Commissioners to verify the correct amount of RZLT due and payable.
What should you do?
If you own land liable to RZLT, you must register for the tax.
You will be able to register for RZLT from late 2023.
You will be required to file an annual return to Revenue and pay any liability on or before 23rd May of each year, beginning in 2024.
Please be aware that interest, penalties and surcharges will apply in relation to cases of non-compliance, for example:
Exclusions.
There are a number of exclusions from RZLT.
Certain properties are excluded from RZLT such as existing residential properties.
Homeowners will not have to pay the RZLT if they own a dwelling which appears on the local authorities’ RZLT Maps, and this property is subject to Local Property Tax (LPT). In other words, residential properties liable for Local Property Tax (LPT) are not subject to RZLT.
If, however, your garden/yard/land is greater than 0.4047 hectares (one acre) then you must register for RZLT.
No RZLT, however, is payable by owners of these properties.
Summary:
For full information, please click:
https://www.revenue.ie/en/property/residential-zoned-land/due-date-excluded-properties.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.