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.
In the United Kingdom, the tax year commences on 6th April and ends on the following 5th April.
HMRC have published a set of criteria which outlines the taxpayer’s requirements in order to accurately and correctly complete a self-assessment tax return. For further information please click link: https://www.gov.uk/log-in-file-self-assessment-tax-return
You are required to file a self-assessment form if you are a self-employed individual or if you receive untaxed income, for example, from rental properties. In other words, the self-assessment system applies to any individual whose income is not automatically taxed at source. To check if you need to file a self-assessment tax return please click: https://www.gov.uk/check-if-you-need-tax-return
For the 2023/24 tax year, taxpayers in receipt of PAYE earnings of up to £150,000 are no longer required to file a self-assessment tax return, provided, of course, that they do not meet any of the other self-assessment criteria outlined by HMRC.
The self-assessment deadline is 31st January 2025 for online submissions, however, if you submitted a paper tax return, the deadline was 31st October 2024. Please keep in mind that the tax is still due by 31st January 2025.
Online Tax Returns must be filed and all outstanding tax paid on or before 31st January following the end of the tax year.
In other words:
Failing to file your tax return or pay your taxes by the appropriate date can result in penalties. Missing the 31st January deadline comes can result in significant penalties even if no tax is owed. For full details, please click: https://www.gov.uk/self-assessment-tax-returns/penalties
In summary, missing any of the Self-Assessment deadlines can result in penalties and interest. A delay in filing your Tax Return by a single day can result in a £100 fine, even if you don’t actually owe any tax.
You can register for self-assessment through the HMRC website before the deadline of 5th October. For further information, please click: https://www.gov.uk/register-for-self-assessment
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 Grant Scheme. 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. In order to qualify the business must be a commercially trading business which currently operates from a property that is commercially rateable. If your business does not have rateable premises then you won’t be covered by this scheme. It is important to keep in mind that this is not a Commercial Rates waiver and businesses should continue to pay their Commercial Rates bill.
To qualify for the Increased Cost of Business (ICOB) grant your business must meet the following conditions:
The Increased Cost of Business (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.
With effect from today, Capital Acquisitions Tax (CAT) rules have changed. A new mandatory Capital Acquisitions Tax filing obligation is imposed on a person in receipt of a gift in respect of certain loans from close relatives. An interest-free loan is a gift on which Capital Acquisitions Tax must be calculated and any arising CAT must be paid. The value of the gift is the highest rate of return the individual making the loan could obtain if that person invested those same funds on deposit. 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. So what does this means for you?
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 Capital Acquisitions Tax (CAT) 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.
If you are facing retirement or redundancy, it is important to understand the tax treatment of your severance package. The following attract beneficial tax treatment:
Statutory redundancy payments are tax exempt. They are based on two weeks’ pay for every year of service plus one additional week’s pay with maximum weekly earnings capped at €600 per week. Income in excess of €31,200 is ignored when calculating Statutory redundancy payments.
Lump sum payments paid by an employer on retirement or redundancy may be taxable.
All or part of the ex gratia termination payment may qualify for tax relief.
The termination payment tax reliefs are not available, however, to any payments made to an employee under the terms of their employment contract. In other words, any contractual payments made by the company to its employee are treated in the same way as a salary payment.
Only complete years are counted for purposes of the reliefs i.e. part of a year cannot be taken into account for the purposes of the calculation.
There are three types of tax reliefs available:
The tax free amount is calculated as follows:
(A × B) − C
15
where
A = the average remuneration for the last 36 months of service up to the date of termination. The value of any taxable benefits can be included in the figure for emoluments.
B = The number of complete years of service.
C = Any tax free lump sum received or receivable under the employer/occupational pension scheme.
There is a lifetime cap of €200,000 on the tax-free amount of a termination payment an employee is entitled to receive.
The amount of the termination payment in excess of the relevant exemption/relief is liable to Income Tax and Universal Social Charge at the employee’s marginal rates.
There is no employee and employer’s PRSI payable on a termination payment.
Before making any decision, please keep in mind that claiming either (i) the Increased Basic Exemption or (ii) the SCSB Relief can affect an employee’s ability to receive a tax-free lump sum from their employer pension scheme on retirement.
When you retire, you can opt to take a tax-free retirement lump sum which is capped at €200,000 under current legislation.
The amount between €200,001 and €500,000 is taxable at the standard rate of tax being 20%
Any amount over €500,000 is taxed under the Pay As You Earn system at the taxpayer’s marginal tax rate of 40%.
For further information on Termination Payments, please click: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-05-19.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.