Revenue have just updated their manuals on Motor Expenses and Travel Subsistence Expenses. They Civil Service rates for Motor Expenses have been changed from those issued in 2015, instead of two rates it has been broken into 4 Bands. Please follow the link below to the actual Revenue Manuals for reference.
BUDGET 2016
Below is a summary of the changes introduced in todays Budget by the Minister for Finance.
INCOME TAX
Marginal tax rate for those earning up to €70k reduced to 49.5%.
The entry threshold for Universal Social Charge (“USC”) will be increased from €12,012 to €13,000.
Otherwise, rates of USC will be reduced as follows:
• Income up to €12,012 – Rates reduced from 1.5% to 1%.
• Income from €12,013 to €18,668 – Rates reduced from 3.5% rate to 3%.
• Income between €18,669 – 70,044 – Rates reduced from 7% to 5.5%
• Income between €70,045 – €100,000 – 8% (no change)
• PAYE Income in excess of €100,000 – 8% (no change)
• Self-employed income in excess of €100,000 – 11% (no change)
Top rate USC exemption to be retained for all medical card holders and individuals aged 70 and older whose total income does not exceed €60,000.
Introduction of a tapered PRSI tax credit for employees up to €624 per annum. Further information on how this is to be implemented will follow.
The ceiling for the higher rate of employers PRSI of 10.75% to be increased to €376 per week.
Earned income tax credit of €550 to be introduced for the self-employed.
Home carer tax credit increased by €190 to €1,000 p.a.
A scheme for the transfer of farm’s to the next generation of farmers has been introduced. This being where a family partnership is set up for a period up to a maximum of 10 years before the farm is handed over and An income tax credit worth up to €5,000 per annum for five years for the partnerships to facilitate the transfer.
Extension of general and young farmers’ stock relief for a further 3 years.
Profits or gains from the occupation of woodlands are being removed from the High Earners’ Restriction.
BUSINESS TAX
Introduction of a Knowledge Development Box to provide for a 6.25% corporation tax rate on profits arising to certain IP assets which are the result of qualifying R&D activity that is carried out in Ireland.
Start-up relief from corporation tax being extended for new start-ups commencing to trade over the next three years.
Commercial Road Tax to be simplified and reduced. Ranging from €92 to €900.
INDIRECT TAX
The Minister confirmed the reduced 9% rate for the tourism and hospitality sector will be retained. There will be no changes to the reduced VAT rate of 13.5% or the standard VAT rate of 23% in 2016.
Duty on a packet of 20 cigarettes will be increased by 50 cent (including VAT) from midnight tonight with a pro rata increase on other tobacco products. No change to the Duty rates on beer, cider or other alcohol products.
CAPITAL TAXES
New CGT rate of 20% on the sale of whole or part of a business applying to capital gains of up to €1m.
The Group A threshold for capital acquisition tax will be increased from €225,000 to €280,000 with effect from 14 October. The Group A threshold typically applies to transfers between parents and their children.
ROPERTY
Local Property Tax effectively frozen until 2019.
STAMP DUTY
Existing €5 Stamp Duty on Debit/ATM cards to be replaced with a 12c charge for ATM transactions, subject to a cap of €2.50 or €5 depending on card type.
I will be happy to answer any queries on the above measures.
Declan Keville, Keville Accounting, Drumshanbo, Co Leitrim
Happy Christmas
Revenue Frequency of Filing Tax Returns and Payments
The Revenue have reduced the Frequency of Filing Tax Returns and Payments
Extension to newly eligible VAT, PAYE/PRSI and RCT customers
Reductions in the filing and payment frequencies for VAT, PAYE/PRSI and RCT by smaller businesses are being extended to eligible customers from 1 January, 2015.
- Businesses making total annual VAT payments of less than €3,000 are eligible to file VAT returns and make payments on a 6 monthly basis;
- Businesses making total annual VAT payments of between €3,000 and €14,000 are eligible to file VAT returns and make payments on a 4 monthly basis;
- Businesses making total annual PAYE/PRSI payments of up to €28,000 are eligible to make payaments on a 3 monthly basis;
- Businesses making total annual RCT payments of up to €28,000 are eligible to file RCT returns and make payments on a 3 monthly basis.
What are the benefits to eligible businesses?
The benefits are two-fold:
- Improved cashflow by only having to make payments at the end of each 3, 4 or 6 monthly period, as appropriate.
- Reduced costs of administration through less frequent filing of tax returns.
How will these changes be implemented?
Revenue will shortly write to each eligible business confirming that reduced frequency of tax returns and payments will apply from 1 January, 2015.
A copy of the letter will also be sent to the agent or tax practitioner on record for eligible customers (other than PAYE/PRSI customers).
Revenue will automatically extend the reduced filing and payment frequencies to eligible businesses without the need for any action on their part.
Budget 2015
Below is a breakdown of some of the key points from today’s Budget for 2015.
INCOME TAX
- The Income Tax Band is being increased from 32,800 to 33,800 for income @ 20%
- The Top Rate of Income Tax is being reduced from 41% to 40%
- Changes to Universal Social Charge
- Lower Rate band increased from 10,000 to 12,000
- The 2nd band increased from 16,000 to 18,000
- The 2% rate is reduced to 1.5%
- The 4% rate is reduced to 3.5%
- A new 8% rate introduced for incomes over 70,000
- A further new rate of 11% introduced for self employed incomes over 100,000
- The medical card exemption from the top rate will remain
- There will be an Income Tax Relief on Water Charges of up to €500.00 per year per household (the maximum tax relief will be 500.00 x 20% = 100.00). This will be done similar to the way tax relief was given on waste disposal.
CAPITAL GAINS TAX
- The Capital Gains Tax introduced in 2011 will expire on 31/12/2014
- The Windfall Tax of 80% on development land will be removed from 01/01/2015 and the standard rate of Capital Gains Tax will apply
FARMING
- The Income Tax exemption for Farm Land leases has been increased by 50% for long term leases.
- Stamp Duty on agri leases longer than 5 years has been removed
- Milk Quotas will be abolished from 01/01/2015
VAT
- Income averaging for farmers is increased from 3 years to 5 years
- The 9% VAT rate for tourism has been maintained
- The VAT rate for non registered farmers is to be increased from 5% to 5.2% from 01/01/2015
BACK TO WORK FAMILY DIVIDEND
- This has been introduced to encourage people back to work. Where a parent returns to work the will retain the child increase portion of their social welfare payment which is €29.80 per child per week for the 1st year and 50% of this payment in the 2nd year.
OTHERS
- Child Benefit will be increased by €5 per child per month from 01/01/2015 and if funds allow by a further €5 per child from 01/01/2016
- There will be a 25% Christmas bonus paid out this year to social welfare recipients
- Social Welfare recipients who receive the fuel allowance will now also receive a €100 water subsidy
- Cigarettes will be increased by 40cent from tonight
- The 0.6% pension levy on private pensions will be abolished from 31/12/2014
- The Home Renovation Scheme has been extended to landlords
- There will be a Refund of D.I.R.T. on savings to first time buyers who use their savings to purchase their home up to 2017 up to a maximum of 20% of the house price.
This is some of the key points which has been published in todays Budget 2015.