Best Tax Accountants Dublin

The Income Tax Return filing deadline is 31st October 2024.

That deadline date is extended to 14^th 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:

Childminders Tax Relief Scheme

You could be entitled to the Childminder’s Tax Relief if:

• You mind three or fewer children in your own home at any one time and

• You earn no more than €15,000 per annum.

• You must have informed the HSE that you will be providing such services in your own home.

• You must be registered as self employed and registered under self assessment.

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 31^st October 2024 or 14^th 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

Irish rent tax credit

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

Training Course Fees

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:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-languages-2009-10.pdf

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/documents/education/s476-approved-it-courses-2014.pdf

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

To get your tax return filed before the income tax deadline, please contact us on queries@accountsadvicecentre.ie

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:

1. You are self-employed.
2. Your only or main source of income is from (a) Rental income, (b) Investment income, (c) Foreign income, (d) Maintenance payments, (e) Fees that are exempt from PAYE or (f) if you have profited from share options or share incentives.

You are obliged register for Income Tax purposes if

• Your taxable non-PAYE income exceeds €5,000 or
• Your gross non-PAYE income exceeds €30,000.

If you do not use ROS to file your Income Tax Return , the tax deadline remains 31^st October 2024.

What’s new in the 2023 Income Tax Return?

NON RESIDENT LANDLORDS

The Non-Resident Landlord Withholding Tax (NLWT) system came into operation on 1^st 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

MORTGAGE INTEREST TAX CREDIT

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 31^st 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

What happens if you miss the Tax filing date?

If you fail to meet the October 31^st 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:

1. If you file your 2023 Form 11 Tax Return after 31st October 2024 but before 31st December 2024 the surcharge will be calculated as the lesser of (a) 5% of the tax due or (b) €12,695.
2. If, however, your 2023 Tax Return is submitted after the 31st December 2024, the surcharge will be (a) the lesser of 10% of the tax liability due or (b) €63,485.

Important Points to keep in mind:

1. Any underpayment of your Income Tax liability will result in interest penalties arising.

2. In order to avoid interest on overdue taxes, you must ensure that your Preliminary Tax is both (a) correct and (b) paid on time. If, for example, you pay a sufficient amount of Preliminary Tax but it’s paid after the tax deadline, then interest may accrue.

3. A late filing surcharge is computed on the full tax liability arising in the year of assessment. It does not take into consideration any advance payments / payments on account.

To get your tax return filed before the income tax deadline, please contact us on queries@accountsadvicecentre.ie

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

To qualify for the ICOB grant your business must meet the following conditions:

• It must be a commercially trading business, currently operating directly from a property that is commercially rateable.

• It must have been trading on 1st February 2024 and your intention must be to continue trading for at least three months.

• Your commercial rates bill must be equal to or less than €30,000 for 2023.

• You must submit confirmation of your bank details to the relevant Local Authority.

• The business must be considered rates compliant. This includes businesses with phased payment plans in place.

• It must possess a valid Tax Registration Number.

• It must be tax compliant.

The Grant Amount

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):

• They specifically targeted businesses in the Retail and Hospitality sectors. Businesses operating within these sectors are now eligible for a second grant payment which is equivalent to the initial ICOB Grant amount.

• The closing date for eligibility confirmation which was 1st May 2024 has now been re- opened from 15^th May to 29^th May 2024.

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:

https://www.mycoco.ie/icob

https://www.dlrcoco.ie/sites/default/files/2024-03/ICOB%20User%20Guide.pdf

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 6^th April 2025, however, the Chancellor is removing this tax incentive in an attempt to increase the availability of long term rental properties.

What is a Furnished Holiday Letting (FHL)?

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.

Currently, FHLs benefit from the following tax advantages:

• There is a full deduction of interest on borrowings from FHL income.

• Currently, profits from furnished holiday lettings are treated as relevant earnings. Therefore, profits generated from FHLs can be treated as earnings for the purposes of making tax advantaged pension contributions.

• Capital Allowances on items such as furniture, fixtures and equipment can be claimed on your Furnished Holiday Let. You can also claim tax relief on certain refurbishment costs.

• On the disposal of the FHL, Business Asset Disposal Relief (10% CGT rate), Business Asset Rollover Relief and Gift Hold-over Relief may apply.

• Provided there is sufficient business activity to demonstrate a trading activity, FHL properties can qualify for Business Property Relief thereby reducing the value of the business for Inheritance Tax purposes by up to 100%.

So, what happens from 6^th April 2025?

• Mortgage Interest Relief will be given as a 20% tax credit. This will result in a reduction in tax relief from 40% for higher rate taxpayers and 45% for additional rate taxpayers.

• The normal residential property CGT tax rate of 24% will apply.

• Relief may be available for the replacement of domestic items in line with the regulations for long term lets.

• FHL profits will no longer be treated as relevant earnings for the purposes of making pension contributions.

• Properties will no longer qualify for Business Property Relief, thereby increasing Inheritance Tax liabilities.

What actions can you take?

You may wish to consider your options before the rules are abolished in April 2025.

Options include:

• Continue renting your property as before but without the current tax advantages.

• Sell the property with the aim of benefitting from the 10% CGT rate.

• Gift the property with the aim of benefitting from Business Asset Disposal Relief and Gift Hold-over Relief.

• Change your rental strategy by renting your property on a long term basis.

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.

Gift and Inheritance 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 31^st 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 31^st December each year which means the relevant return must be filed on or before 31^st October of the following year.  Therefore, the first mandatory filing date will be 31^st October 2025.

What is a “Close Relative”?

A close relative of a person, includes persons in the CAT Group A or B thresholds, and is defined as follows:

• a parent of the person,

• the spouse/ civil partner of a parent of the person,

• a lineal ancestor of the person,

• a lineal descendant of the person,

• a brother or sister of the person,

• an aunt or uncle of the person, or

• an aunt or uncle of the spouse/ civil partner of a parent of the person.

What about Loans from Private Companies?

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:

1. Where the loan is from a private company to a person in circumstances where the beneficial owner of the company is a close relative of the borrower.

2. Where the loan is from a person to a private company in circumstances where the beneficial owner of the company and the lender are close relatives.

3. Where the loan is from one private company to another private company in circumstances where the beneficial owners of both companies are close relatives.

What Loans must be Reported?

A mandatory filing obligation arises for the recipient of the loan where:

• there is a loan between close relatives,

• he/she is deemed to have taken an annual gift,

• no interest has been paid on the loan within six months of the end of the calendar year and

• the total balance on the loan and any other such loan exceeds €335,000 on at least one day during the calendar year.

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 31^st October 2025 in respect of the calendar year ending 31 December 2024.

What Information must be Reported?

The CAT return must include the following information in relation to reportable loan balances:

1. The name, address and tax reference number of the person who made the loan,

2. The balance outstanding on the loan and

3. All other such information as the Revenue Commissioners may reasonably require.

 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.

From 21st May 2021 Revenue will recommence their assessment of the tax clearance status of businesses.

Please be aware that this may result in the rescinding of the tax clearance status of businesses that are currently in receipt of the EWSS and/or the CRSS.  It is essential to check the status of your tax clearance as your business may becoming ineligible to receive further payments under these schemes until the compliance issues concerned are fully resolved.

If Revenue have contacted you to remind you of your requirement to file outstanding returns or to address other compliance issues in order to retain your tax clearance status, please make sure you do so as a matter of urgency.

In summary, businesses which are reliant on the EWSS and/or the CRSS should take immediate action by contacting Revenue and addressing the outstanding issues.