When most business owners hear tax or taxation their eyes usually gloss over and they will feign some minor level of interest in the discussion. Lets be honest you would much rather being talking about more interesting topics like revenue growth, sales, new marketing strategies, merger and acquisitions, how all of your customers are overjoyed with your service or the many ways in which your company is breaking new ground leaving competitors in your dust!

After all the perception is that tax is a non-innovating area and what possible benefits can there really be unless you are an Apple or other multinational organization with bases all around that world can be utilized? Well have a rethink because if that is your mind set then you may be leaving money on the table as there are a range of area to look at that can save your business money and put resources back into the businesses coffers!

It is always important for businesses to be able to identify where tax opportunities that are out there. By seeking the best possible outcomes for your business significant cash-flow savings can be achieved which can be vital in downturns or quiet periods. Real savings can be made which will impact on the bottom line. Here are some of the commonly overlooked areas and strategies that you need to look closer at for your business:

• Bad Debt Relief – can you claim a refund of VAT already paid to Revenue? Many businesses have used this relief where debts can be difficult to collect.

• Cash Receipts – can you account for VAT when paid by your customers rather than when the invoice is raised?

• Large Asset Purchases/ Unprocessed Supplier Invoices – are you reclaiming VAT at the earliest possibility?

• Retained Deposits/Cancellation Fees – can you claim a refund of VAT where a deposit or advanced payment from a customer has been retained but no supply has taken place?

• Is 75% or more of your turnover generated from selling goods to customers established overseas? If so, you may be able to have your suppliers invoice you without charging VAT?

• VAT on “Qualifying Accommodation” in Ireland – can you reclaim VAT incurred on these costs which relate to attending conferences?

• VAT on “Business Cars” – can you reclaim VAT incurred on such purchases?

• Reclaiming Foreign VAT –EU VAT refund claims can now be made to Irish Revenue who in turn seek the refund from the other country.

• Timing of Invoices – is it possible for a business to delay issuing invoices to defer the time at which the VAT is due?

• Timing of VAT Returns – can you submit your VAT returns less frequently if you have small liabilities or more frequently if you are in a continuous refund position?

• Tax Recovery Strategies – should you be reclaiming more VAT? There are many ways to calculate the appropriate percentage recovery, not just turnover basis.

• VAT Rates – should you be accounting for VAT at a lower rate? Suppliers should review whether there are opportunities to reduce their VAT liabilities, particularly where they supply a wide range of goods and services

It is vital that businesses dedicate time to evaluating their VAT position as this can help to ensure that liabilities are less likely to accrue and may well open up the possibility of some actual tax savings.

Common Mistakes Businesses Make in Relation to PAYE. Don’t Make The Same Mistakes!

• Employees/Directors are often placed on the wrong PRSI rate. The cost of an error to the employer can be significant as the rate of employers PRSI is 10.75%

•  There is a tendency for employees placed on secondment to remain on the Irish payroll system. This can lead to significant time/cost incurred in obtaining refunds for the employee post year end. When certain conditions are met a PAYE exclusion order can be obtained this allows the employee to be paid without deduction of PAYE.

• Employers often obtain exclusion orders for directors, however these can only be obtained in very limited circumstances. Penalties may arise for director and/or company where an incorrect application is made.

•  Generally a foreign employer must register and account for Irish PAYE if an employee is carrying out their duties of employment in Ireland. Penalties arise for failure to register and operate PAYE.

•  Employers often assist employees with some relocation expenses where an employee is moving abroad. These expenses are potentially liable to Irish payroll taxes with some specific exemptions

•  If an employee forgoes remuneration in return for any benefit, then the legislation in relation to salary sacrifice applies and the remuneration sacrificed is usually taxable in full and so subject to payroll taxes.

•  A common mistake in calculating motor expenses is that where a journey commences from the employee/director’s home, the journey is not restricted if the journey from home to temporary place of work is shorter than normal place of work to temporary place of work.

• A common error in the calculation of ex-gratia payments is the inclusion of contractual pay in lieu of notice in the ex-gratia payment.

• A typical error in the area of tax free cessation payments is the inclusion of total years’ service rather than the number of whole years’ service. With effect from 1 January 2011 cessation payments made are subject to a life time tax free payment limit. It is the employers’ responsibility to ensure that this threshold has not been breached previously by the employee.

Employed v Self Employed Taxation Issues

The question of whether an employee/employer relationship exists between two parties can sometimes be difficult to ascertain. Over the past number of years there has been an increase in Revenue audits targeting this area.

The Universal Social Charge (USC)

The introduction of complex legislation in this area has led to confusion as to what income is liable to this charge and what items are deductible.

Benefits in Kind (BIKs)

Common errors in this area relate to BIK on company cars, medical insurance premiums, employee/director’s loans and professional.

Share Based Remuneration

Recent Finance Acts introduced onerous legislation for employers who have share schemes in place. It has become increasing difficult to determine when the tax and USC is due, whether the shares are liable to PRSI.

Occupational Pension Schemes and PRSA’s

There is a general lack of awareness of the rules surrounding pension schemes and the amounts allowable for tax purposes.

Reporting Requirements

The taxes legislation impose a number of reporting requirements which are often overlooked such as the RSS1 form for share schemes, P11D for directors remuneration and employer PRSA contributions and reporting requirements relating to termination payments.

Third Party Benefits

Where a benefit provided to an employee by a third party (not that employee’s employer) gives rise to a charge to income tax, the provider of the benefit is responsible for accounting for the PAYE/PRSI.

There are also some common tax opportunities that can be utilized to the advancement of the business, business owners or employees.

Travel Scheme

A tax efficient method of increasing an individual’s remuneration is through the provision of a monthly or annual travel pass under the “Tax Saver Commuter Ticket Scheme” or the bike scheme. A taxable benefit in kind does not arise nor are they affected by the salary sacrifice provisions.

Company Pension Scheme

A taxable benefit in kind does not arise on employer contributions to a Revenue approved superannuation scheme.

Insurance Contributions

In the areas of health insurance it is possible for an employer to provide insurance to an individual without giving rise to a taxable benefit in kind if certain conditions are met.

Subsistence and Mileage

Where qualifying expenses are paid within published civil service rates, payments to employees can be made without the deduction of payroll taxes.

Relocation Expenses

Employers often assist employees with some relocation expenses where an employee is moving abroad, it is possible to pay certain expenses to employees without deduction of payroll taxes.

Special Assignment Relief

Tax relief may apply, under certain conditions, to employment income of non-Irish domiciled individuals who are employed by a foreign employer but who carry on the performance of their employment in Ireland.

In-House Medical Plans & Corporate General Practitioner Services

In some circumstances payroll taxes need not be applied to any benefit arising from the employer’s contribution to an in-house medical plan or payment to the general practitioner.

Medical Check Ups

Where an employer requires and pays for their employee to undergo a medical check-up it will not be considered to be a taxable benefit in kind.

Staff Discounts

If an employer gives their staff discount on the purchase of goods no taxable benefit will arise where the cost paid by the employee is greater than the cost of the employer acquiring the manufactured goods.

Mobile Phones/Laptops /Computers

When employers provide the above for business use and bear the costs of installation and use, a tax charge will not apply to the employee provided that private use is incidental.

Course or Exam Fees

Course or exam fees paid by an employer will not give rise to a taxable benefit in kind if the course undertaken by the employee is relevant to the employer.

Professional Subscriptions

Professional subscriptions paid by an employer on behalf of employees in specific circumstances will not give rise to a taxable benefit in kind.

Long Service Awards

A taxable benefit in kind will not arise in respect of an award made to mark long service where specific conditions are met.

New Employees – FÁS schemes

If as an employer you are taking on employees, it is worth considering the various funding provided by FÁS for employing certain individuals such as the Job Assist scheme and Employers PRSI Exemption Scheme.

Small Benefits

Where an employer provides an employee with a small non cash benefit (i.e. a benefit with a value not exceeding €250), PAYE and PRSI need not be applied to that benefit.

Payments to Directors

Payroll taxes must be operated on all payments to directors (including non-executive directors) of Irish companies. For non-executive directorships, Class S PRSI should apply. This means a liability to employer PRSI should not arise. Under Irish tax legislation a director is an office holder and an employer must operate payroll taxes on any remuneration or benefits received. This is also the case for individuals who invoice their fees through a corporate as the Revenue’s view is the individual is merely mandating their fees as a company cannot hold a directorship.

Pay P35 Returns the Cash Flow Effective Way

It is possible to make on annual P35 return and avoid monthly returns. This can be done by paying agreed monthly amounts by direct debit. This may be of particular interest to seasonal businesses as it can spread the annual PAYE liability over the year.

Case Studies of Effective Tax Opportunities In Practice

Case Study 1. VAT Case Study

Upon examination of a new clients activities we discovered a company with an unusually high amount of bad debts which was negatively impacting their business. The client was unaware that a VAT reclaim could be made in respect of most of these bad debts. We assisted the client to make a claim to Revenue and the client received a significant refund.

Case Study 2. Benefit In Kind

A company underwent a Revenue Audit and did not make a voluntary disclosure prior to commencement of the audit. During the course of the audit it was discovered that they were not operating benefit in kind in respect of three company cars. The Revenue imposed a 75% penalty on the basis that a higher duty of care arises on fiduciary taxes. By the time the case researched us the actions were irreversible in financial terms but we were able to negotiate non publication of the error and save negative PR for the new client.

Case Study 3. Benefit in Kind 

A PAYE health check for a sized company. Upon investigation we discovered that they were failing to comply with the benefit in kind rules applying to company cars. The company made an unprompted voluntary disclosure of the issue to Revenue. The end result was a lower penalty being incurred than would otherwise have been payable. This saved the business many thousands of euros in fines and penalties.

Case Study 4. PAYE 

By conducting a PAYE health check for a not-for-profit local organisation we discovered that they were not restricting mileage claims to: the shorter of their place of work to temporary place of work or their home to temporary place of work. We made an unprompted voluntary disclosure and avoided a large fine and negative press for the client.

Avid Partners Business & Financial Advisors can provide tax savings assistance in the following areas :

• VAT reviews for clients to determine potential VAT exposures and savings;

• Specialist VAT advice regarding property-related transactions (e.g. sales and purchases, leasing);

• Advice in relation to cross-border transactions;

• Assistance with Revenue audits and investigations and we can deal with the authorities fully on your behalf;

• VAT compliance services (VAT returns, Intrastat returns, VIES returns etc);

• Payroll tax reviews for clients to determine potential exposures and savings;

• Specialist payroll tax advice in relation to cross-border issues, ex-patriot and non resident employer issues; and

• Payroll tax compliance services (monthly payroll services, annual P35 returns);

• Systems reviews to identify weaknesses and risks in the way in which your returns are processed.

If you wish to discuss any of these issues contained in this report please call us on 0818 303087 for tax opportunities for your business. Alternatively you can email us at advice@avidpartners.ie. We look forward to assisting you with your business.

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Registering A New Business In Ireland

Establishing a new company, or company formations as its know in the industry, used to be a very confusing and more complicated issue that it should have been. Now under the New Companies Act 2014 the process has been simplified. The old process of filling in long detailed forms and listing in painstaking detail the exact nature of every business activity the company is involved in will be a thing of the past. The New Companies Act 2014 allows for Single Director companies to avail of limited liability status (one company secretary is still required) and new definitions of a “Micro Business” means that small companies with a turnover less than 700K will not have to file any details of their activities other than the Statutory Annual Return. More details of the act can be found online at www.avidpartners.ie/resource-centre/useful-industry-articles-and-reports/the-new-companies-act-2014.

So What’s Involved In Company Formations in Ireland?

To incorporate a company a form called an A1 is completed and sent to the Companies Registration Office (CRO). At this stage you must choose the kind of company you wish to form from the options available (Avid Partners can assist you with the options) with most companies being incorporated as Limited By Share companies. The A1 form need to be signed by the company director(s) and the company secretary. Other details such as the name of the company, its place of business, names of its directors, shareholdings and the activities of the company are also required. Once these details are all processed and completed they are then sent to the CRO for formal registration. The company is usually officially formed within 5 days of receipt by the CRO. Then you are officially in business and the real work begins!

Avid Partners can assist you throughout the steps involved in forming a company and in managing your financial affairs through out the companies existence. For further details on company formations Ireland contact us on 0818 303087. Email us at advice@avidpartners.ie or alternatively you can complete the enquiry form below.

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Your Accountant can sort out your Tax Return or your Annual Accounts and provide Advice on a range of issues, but how do you get the best return on the fees you pay to an accountant?

Here are the 10 Ways To Get The Best Value From Your Accountant

1. Choose Carefully. Look for accountants with experience of your type of business. Anyone can set up as ‘an accountant’, so look for chartered or certified accountants, whose qualified status is backed by membership of professional bodies. A large firm suggests reliability, but a smaller one may respond better to your needs. Ask prospective accountants how they can help your business. Request references and proof they have professional indemnity insurance, before you make your final decision.

2. Explain your Expectations. Your accountant will summarise terms and conditions in a letter of engagement. Put your expectations in writing, too. Describe the level of service you require, for example, how quickly you need queries to be answered. Ask to deal with a specific contact, to help build a close professional relationship.

3. Ask Questions. Check what other services your accountant can offer. These could include guidance on setting up your business, preparation of financial forecasts, help with loan applications, audits, investment advice and other suggestions for minimising your tax liability.

4. Use your Accountants’ Contacts. Accountants specialising in your type of business can often suggest good trade contacts. Perhaps your accountant knows a supplier who can offer you a great deal or maybe they know of a potential investor.

5. Keep Talking. Communicate regularly with your accountant to get the best possible value from the relationship. Schedule quarterly meetings to review your firm’s performance, so you can better plan for the future. Be sure to meet before producing your end-of-year accounts or tax return.

6. Keep User-Friendly Records. If necessary, ask your accountant for advice about how best to maintain your financial records. If your books are easier to read, you will save them time, which should mean a lower bill.

7. Do the Easy Jobs Yourself. To reduce your outgoings, take care of simple bookkeeping tasks yourself, possibly by using accounting software. You could then better focus your accountants’ efforts where they best serve your business.

8. Delegate. If your time would be better spent concentrating on sales or product development, you could ask an accountant to take greater responsibility for your bookkeeping and payroll. Although a more expensive option, this could free you up to make more profitable use of your time.

9. Shop Around. Armed with recommendations of good accountants, get a full breakdown of an accountant’s charges and services. Work out which one offers you best value for money (and that’s not necessarily the cheapest, of course). And, at least once a year, review the value for money you receive. If you believe you can get better advice and value elsewhere, go elsewhere.

10. Seek Advice. An experienced accountant can offer sound advice in a number of areas. For example, they could help with your business plan, help you estimate the cost of new projects or advise on the levels of investment needed to achieve your business development goals. If you decide to sell up, they could even help with valuing your business and advise on the sale to minimise your tax liability.

Contact Avid Partners Today to see how we can help you drive your business forward. Call us on 0818 303087. Email advice@avidpartners.ie or alternatively complete the enquiry form below and I will revert back to you as soon as possible.

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New legislation will soon be enacted which will consolidate the existing Companies Acts 1963-2013 into one new single piece of legislation (Companies Act 2014). The Bill passed the final stage before enactment on 10 December 2014, will now be presented to the President for his signature, which is expected to happen late December or early January. Changes to the companies act will make it easier to register and operate a limited company in Ireland and will simplify the provisions of Irish company Law. The bill is expected to be signed into law shortly with its Full Implementation Scheduled for June 2015. Some of the Main Features of the New Companies Act 2014 include:

• The need for a ‘physical’ Annual General Meeting (AGM) will be removed, once the shareholders agree.

• Single Director Companies will be permitted once a Separate Company Secretary is appointed.

• Under the New Companies Act 2014 if a creditor is owed over €10,000 and the sum remains unpaid for three weeks then an application can be made to the courts for the liquidation of the company.

• Offences for breaching the companies act will now be ranked on a Scale of 1-4 (1 being the most serious) with the punishments for breaches of the law clearly stated, resulting in greater transparency. Fines ranging from €5,000 – €500,000 are outlined in the act.

• The Definitions of a Small & Medium Sized Company have changed. Definitions are now stated as:

  • Small Company – Turnover <€8.8m, Balance Sheet Total <€4.4m, No of Employees <50.

  • Medium Company – Turnover <20m, Balance Sheet Total ,10m, No of Employees <250

• The law relating to the strike off of companies will be changed and a legal distinction will be drawn between voluntary strike-off and involuntary strike-off.

• The Memorandum & Articles of Association will be replaced by a ’Constitution’ document which will be provided by default (unless a specific company constitution is requested).

• A new principle of “Summary Approval Procedure” will no longer require companies to obtain High Court approval for procedures like capital reductions and solvent windings up.

• Audit Exemption will now be possible for holding and subsidiary companies once certain conditions are met. Groups and Companies Limited By Guarantee without a Share Capital may avail of audit exemption if they are under the thresholds.

• Thresholds for Audit Exemptions will also change allowing more companies to avail of them.

• Companies will be able to trade in whatever legally permitted business they wish without the need to pass a special resolution.

• A Private Limited Company will become known as a ‘Company Limited by Shares (LTD)

• LTD companies can pass majority written resolutions.

• Directors of a business must be 18 years or older.

• The Annual Returns and Accounts filing requirements have not changed under the new act.

It is important for Every Business to be aware of the Provisions of the New Companies Act 2014 as the details will impact on their business in a number of ways. Directors need to know their requirements when it comes to complying with company law and also of their rights when it comes to dealing with other companies. Directors also need to be aware of their standing when issues of Payment and Creditor procedures arise and be aware of the formal avenues that must be followed in order to gain satisfaction when required.

Failure by Company Directors to know the main provisions of the New Companies Act 2014 can be costly with fines ranging from 5k to €500k for breaches of the new act, whether through deliberate actions or ignorance of its provisions. Start getting ready for the New Companies Act 2014 in advance of it becoming law in June 2015. Stay ahead of the curve and know your new obligations as a business owner or director. The duties of the company director will be simplified and clarified under the new act but you must know your new responsibilities as ignorance is not an excuse.

Contact Avid Partners today if you require any clarifications on the upcoming New Companies Act 2014. We can assist you with a smooth transition and ensure that your business is compliant with all of the new provisions of the act. Phone us on 0818 303087 or email us advice@avidpartners.ie. Alternatively you can complete the contact form below.

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Avid Partners last talk of the year took place on Tuesday Night at the Fitzwilliam Hotel in Dublin. We had 16 companies consisting of Clients, Small Business Owners, Plato members and Enterprise Ireland in attendance. The topic for the night was “Business Turnaround & Performance Improvement” and the format was a very informal discussion based around the topic with contributions from everyone in attendance. It was great for us as facilitators and for all business owners at the event to learn from each others experiences and share each individuals perspective on the topic. This made the event one of the best of the year and it is very rewarding for everyone involved to be able to take away such practical information from the night.

We are convinced that there is significant merit in these kinds of events that encompass networking, business owners chatting over a coffee and talking about their experiences. Business is about people buying from people and to do this there needs to be familiarity, trust and a large degree of confidence. Getting to know about other business in this kind of setting seems to be a well received method of making valuable connections and getting your business known by other businesses in one evening.

Avid Partners will be launching our next series of events starting in January so keep in touch as we would be delighted to see you at our next event and discuss the ways in which your business can be improved. We would love to hear from you. Call us on 0818 303087. Email us at advice@avidpartners.ie or alternatively you can fill in the form below.

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Avid Partners are delighted to present the first of our Annual “Small Business Pain” Market Research Reports which identify the Key Strategic Business Issues currently being experienced by Small Businesses in Ireland and the degree to which each factor is having a limiting effect on the growth of their organisation.

This report is based on the views of over 100 Business Owners and senior management representatives of the small business sector in Ireland and comprises of a mixture of industry types and company sizes. The research was undertaken by Avid Partners Accountants & Business Advisers to identify and catalogue the importance business owners are currently placing on the key issues impacting on their business.

Coming from a position of supporting small businesses in the management aspects of their operations on a day to day basis, Avid Partners experience first-hand many of the problems that small businesses face in driving their companies forward. This project was undertaken to investigate on a larger scale the current state of play within the SME Sector, specifically the issues that are holding small businesses back from achieving their true potential, as well as analysing the future trends of the sector going into 2015.

The results of the market research can be used by policy makers to address the needs of the small business sector and by the small business community themselves to understand the key issues impacting on their sector. Once identified small businesses can then develop strategies and actions to overcome these barriers to growth by addressing the key findings of this report and by building the conclusions into their business plans for next year.

We would like to thank you in advance for reading this report and we hope it is of assistance to small businesses and the sector as a whole in driving new prosperity into the SME business landscape. After all Irish business is shaped by small enterprises and it’s their efforts and entrepreneurship that drives the whole economy forward.

Executive Summary

Purpose of the Research

The research was undertaken to identify the key business issues that are currently effecting the small business sector in Ireland. Going into a new business year Avid Partners wanted to examine first-hand the problem areas that are holding back small business and suggest solutions to these problems that they and policy makers can use to assist the small businesses sector grow in 2015.

Key Findings

• Cash Flow was determined to be the most critical issue being experienced by small business owners. This was highlighted both through the survey and in the one to one interviews. Educating potential customers on the businesses products and the need for their services was also deemed to be a highly critical issue for small businesses.

• The levels of recovery and optimism trends do not appear to be evenly spread throughout the country. Variation was detected between small businesses in Dublin compared to the rest of Leinster and in larger cities and towns compared to more rural based enterprises.

• Accessing finance has not become easier for small businesses in 2014 despite the high profile campaigns promoting small business finance products and the perception that banks are “open to small businesses”.

• The majority of respondents to the survey are planning on growing their business through their own resources rather than bank loans suggesting a “slow and steady” approach to future growth. This suggests a lower risk appetite amongst the sector when it comes to investment in their company’ future.

• The biggest perceived threat to growth for small business is the stated high costs of doing business in the sector. Similarly the area that small business owners suggested government and support agencies should focus the majority of their resources was in seeking ways to reduce business costs and taxes.

• A lack of high quality available staff is not a critical restriction on growth for small businesses at the present time. There is evidence however that competition for top talent is starting to increase and small businesses need to be aware of this trend and factor it into their growth planning for 2015.

• Overall optimism for small businesses going into 2015 is high with the vast majority of respondents expecting to grow their businesses next year. This demonstrates a continued positive trend in the sector as most feel that the worst of the downturn is behind them.

Recommendations

• Small business need to pay particularly close attention to the area of cash flow and closely monitor this critical area on a continual basis. Cash Flow is not the sole domain of larger businesses and multi nationals. Monitoring should be done regularly either by the business owner themselves or with the assistance of an external financial advisor. Proper accounts should be maintained regularly (monthly or quarterly) and never only at the end of a financial year. Small businesses need to truly recognise that sales and profits are not the same thing and neither is a sale complete until the full invoiced amount has been received (booking a full sale based on a deposit). Costs always have to be closely monitored as do payments coming due and effective cash flow planning can go a long way towards addressing this key issue before it ever becomes a major problem.

• Growth is becoming more of a key focus for the majority of small businesses and for this companies need to create a greater emphasis around marketing. Such activity doesn’t just happen it must be planned for and implemented. Marketing doesn’t have to be an expensive endeavour suited only to larger companies. Every business can implement some proactive marketing strategies at low cost particularly in the areas of direct marketing, events marketing, public relations, online marketing, networking and referral programmes.

• When attempting to seek external finance small businesses would be well advised to seek some support from companies with experience in formulating such documentation, as despite the PR campaigns to the contrary banks are being very selective about who they loan money to. if any aspect of the application isn’t crystal clear odds are the request will be refused at an early stage.

• For regional businesses that are still struggling to come out of the recession and have less reasons to be optimistic going into 2015, a key piece of advice would be to seek as much external support as possible. If their businesses haven’t started to show signs of improvement by now then their current strategies may not be the right ones to be following and a new direction may be needed. It can be very difficult to see this when a business owner is so intrinsically attached to the current philosophy so that’s why seeking external opinions are critical.

• Whilst a lack of high quality staff was not identified as a crucial issue for small business at the present moment, there is growing evidence to suggest that competition for the best talent is heating up going into 2015. As high quality talent is critical to the growth of small businesses it would be worth noting that for any small business thinking of taking on a new key staff member, early in the New Year may be a good time to start the process. Take action before competition becomes more intense as otherwise they risk competing with the larger organisations with larger pockets available to them to attract key talent.

Future Research

Avid Partners intends to conduct an annual “small business pain” research project and compare the results to previous findings in order to gauge trends and changing philosophies. This will aid the small business sector and provide a baseline reality for small business owners to know what’s really happening in their sector with a unique “snapshot in time” perspective on their industry.

Contact Avid Partners

We would be delighted to hear from you whether it is to discuss the implications of our research for your company or to discuss any area that may be causing some concern for your business. Call us on 0818 303087, email us at advice@avidpartners.ie or alternatively you can fill out the form below.

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Start Getting Organised Now For 2015!

Are you one of the many who left it until the last minute to file your tax return this year? Were you in a panic this week or working all hours Wednesday and Thursday to get your documentation together? If the answer is yes then you were not the only one. Many people were not fully prepared for last nights deadline and were scrambling yesterday to complete their returns on time to avoid the nasty penalties that follow for a late submission. It doesn’t have to be this way!

Getting yourself organised now for next years returns will take away all of that unnecessary stress and will also allow you to plan ahead and know what your liability is for next November. This will allow you to save the required amount throughout the year rather than risk the prospect of being hit with an unexpectedly high number closer  to the time and having to scramble to get the funds together. A little foresight and effective planning can go a long way towards an easier life when it comes to tax returns!

Over half a million people were required to send in a self-assessment tax return this year. Every year, without fail, a large proportion leave it until the last minute! This creates added pressure on the individual and also puts pressure on Revenues IT Systems from so many people trying to upload and fill in forms online resulting in the system slowing down. PAYE earners who have rental income or who have benefited from share options are now getting closer scrutiny the Revenue this year and next, so the need for effective preparation falls not only on the self employed but on PAYE workers who are required to submit as well!

6 Reasons to Get Your Tax Returns Prepared Early In 2015

Several lessons can be learned from the tax returns experiences of the majority this year. Take the progressive approach and start planning ahead.

1. File Early But Only Pay Tax On November 13th 2015

Preparing and filing your tax return early in the year still means that you don’t have to pay the tax liability until the normal due date in November next year. Why wouldn’t you file early and get prepared?

2. You Have Time To Save For Any Tax Due

Calculating and filing your tax return early will allow you to save for your tax bill monthly and take the pain out of scrambling last minute to get the cash together. Or worse not being in a position to pay the deadline and incurring penalties or having to agree a payment plan with Revenue under their terms.    

3. Filing Early Reduced Mistakes and Gives You Time

By filing early you can plan and utilise all of the tax options open to you regarding tax based incentives which could assist your tax position. Also filing early reduces the risks of mistakes being made which have to be corrected thereafter.

4. Refunds Can Be Processed And Received Quicker

Should you find yourself in the fortunate situation where you are due a refund from Revenue, then filing early can mean that your refund is processed quickly and you will receive the money in a quicker time period. This is because refunds are often  processed far slower around tax deadline as Revenue staff and systems can be overwhelmed at this time. If you file early you will get your refund quicker! Why wait?

5. Avoid Missing The Tax Deadline

Every year despite all of the advance reminders and the news reports there are always the many stragglers that leave everything to the last minute and many leave it too late! Thus they miss the deadline and incur nasty penalties as a result (up to 10% of their liability). A further daily rate can also be added to the liability by Revenue. Why pay more that you have to? It doesn’t make sense to waste money. You worked hard enough to earn it in the first place! 

6. Open Up A Savings Account For Your Tax Bill

By opening a separate tax account you will be able to chip away at your liability through out the year and this will help you manage the business from a cash flow perspective, which is crucial to the stability of every business. Also the interest you make on the savings will also help a little bit when it comes time to pay. Every but helps!

Start Preparing Now for 2015 While It Is Still Fresh!

Take the right approach for next year and get your tax returns organised early. Get them prepared by your accountant early in the year, filed, know your liability and start setting aside a portion every month so that you are all set come next November. Don’t go through the same stress and hassle every year by leaving it until the last minute! Meet your accountant December or January and be ahead of the curve for next year! You might well get some sound business advice for 2015 as part of the process.

Contact us today at 0818 303087 or email us at advice@avidpartners.ie. Alternatively you can fill in the enquiry form below.

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Grow Your Business Seminar at the Beautiful Location of Dun Laoghaire

Many thanks to all who attended the Avid Partners “Grow Your Business Seminar” in conjunction with the Dun Laoghaire Rathdown Chamber of Commerce. Over 4o local businesses were represented on the day and a thank you to guest speaker on the day Chad Gilmer of IPLANiT web design. We look forward to engaging with all of the attendees at some point in the future and we hope to see you again at a future seminar with Avid Partners.

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Broadly Positive Reaction to Budget 2015 with Cautious Optimism the Soundboards 

A broadly positive, if cautious, budget 2015 has been announced with no major surprises from Michael Noonan today in his budget speech. PAYE earner will benefit from reduced tax rates and increased bands, support schemes to SME’s have been extended and increased, the “Double Irish” taxation loophole is to be closed, new schemes for the farming and agricultural sector have been announced, water charge relief has been introduced, the pension levy is to be scrapped, back to work schemes have been increased and smokers will be paying more for the privilege as widely anticipated. Below are the main points arising from today’s budget. A comprehensive breakdown of what it means for you and your business will follow along with an analysis of what it all means to the business sector.

Income Taxes

• The Higher Rate of Tax reduced from 41% to 40%

• The Tax Band has been increased from €32,800 to €33,800

• Income above €70k still paying the 52% nominal tax rate

• Universal Social Charges:

  • Entry level raised to €12,000

  • 2% rate reduced to 1.5%

  • 4% rate reduced to 3.5%

Corporation Taxes

• No change to the 12.5% rate and no changes foreseen in the medium term

• The “Double Irish” tax loophole is  being abolished. New rules introduced to state that all companies resident in Ireland for business purposes must be tax registered in Ireland.

Small & Medium Sized Businesses

• The Home Renovation Incentive Scheme has been renewed and extended to include rental properties

• Strategic Banking Corporation to provide funds to the small business sector launching by the end of the month

• The Employment & Incentive Investment Scheme has been extended with the scheme further extended to include nursing homes and certified international traded financial service firms

• The Jobs Plus Scheme has been extended and the number of positions available under the scheme doubled to 6,000

• 3 year corporate tax relief for start-ups extended

Farming & Agri Sector

• No milk quotas from 2015

• Income tax exempt thresholds to be increased by 50 per cent, with new threshold for leases of 15 years and over

• Range of income averaging for farmers to be extended from three to five years

• CAT relief for agricultural property to be targeted to ensure it is used by active farmers

• CGT retirement relief to be broadened

• Stamp duty relief to be extended for non-residential land transfers between certain close relatives, and stamp duty on agricultural leases in excess of five years to be removed

Personal Taxation Schemes

• The pension levy of .6% until the end to the year with the 15% level being scrapped by the end of 2015

• Tax relief on water charges worth up to €100 announced

• DIRT refund for first time buyers on their savings to assist with a deposit on their  home

• Cigarettes to increase by 40 cents from midnight

• Child benefit up by €5 per child

• No rises in alcohol, petrol, motor tax or VRT

Other Schemes

• €1.6bn to be made available for the support of 300,000 work and training places next year

• HRI horse and greyhound prize funded topped up by €6m

• 9% VAT for tourism and hospitality extended

• 25% bonus payment to social welfare recipients this Christmas

• Back to work family dividend to be introduced

• Recruitment into the civil service to resume in 2015

• Capital Gain Tax relief on property to be scrapped

Conclusions and What It Means for Your Business!

Budget 2015 can be summed up by – A little bit of something for everyone but not a huge amount for anyone! The only real surprise was the lack of surprises. There have been a range of measures of measures introduced to ensure that everyone gets something back from tax reliefs for 2015. In relation to personal tax the reduced rates on the higher rate is welcomed along with an increase in the tax band. USC rates for some tax players have also been reduced which is a positive development. Water charges relief will help take the sting out of the unpopular tax but being a relief not a discount PAYE workers will need to make a tax return to claim, many for the first time. This asks the question “will the relief actually be claimed by the majority”.

For small business many schemes have been extended including the home renovation scheme, the EIIS scheme and the start up relief for entrepreneurs. Corporation tax relief for the first 3 years of a new business has also been extended to encourage new businesses. Plenty also for the Agri Business sector to mull over with a number of schemes being introduced to make it easier for farmers to develop and make an income from their businesses. The  “Double Irish” will be no more with foreign companies registered in Ireland also required to be tax resident in Ireland as well. This measure had been anticipated and adds stability for the future in the area of foreign direct investment.

Some of the other announcements of note are is the abolition of the pension levy which will be pashed out by the end of 2015, an increase in 40c on the price of cigarettes, the introduction of a “Knowledge Development Box” to compete with the UK on intellectual property initiatives, further advancements in the R&D tax credit relief scheme and an increase in the artist exemption threshold will be a help to musicians and artists in the country. Removing some of the tax burdens from the majority may be the best way to sum up Budget 2015 with some stimulus measures included to get business activity moving in a positive direction into next year.

Contact Avid Partners to see how Budget 2015 will effect your business.  Call Avid Partners on 01 4286900 or email us at advice@avidpartners.ie.

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Avid Partners are one of the leading lights for SME’s in Ireland and are continually helping small business grasp the fundamentals of business effective business processes and our goal is always to enlighten business owners on the pitfalls to avoid as well as the likely roadmap for success. Contact Avid Partners today to enquire about any speaking engagements relating to your organisation or to discuss any aspect of our business programmes further.

www.avidpartners.ie. Tel: 01 4286900. advice@avidpartners.ie.

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