Welcome to our April newsletter. Spring really has arrived and the longer brighter days are good for the soul.

We are now well into the year but I feel it is no harm to remind all of our clients, of these simple but very effective ways to reduce your PERSONAL TAX in 2025/for 2024 tax return.

• Check if the interest you paid on your mortgage in 2024 was greater than what you paid in 2022. You may be entitled to a credit of up to €1,250 (see details below).

• Review your earnings for 2025 especially if you are married or more importantly got married in 2024. The amount a married couple can earn in 2025 @ 20% tax is now €88,000 and this can be split that the higher earner can earn up to €53,000 @ 20% while the secondary earner can earn €35,000. This alone can increase a married couple’s net pay by €1,800 per annum, or in some circumstances even more.

• Buy an electric vehicle (EV) up to €45,000. A company may provide an EV to an employee with an original market value (OMV) of up to €45,000 totally free of benefit in kind. The threshold is due to reduce in 2026 to €25,000, BUT this has been the case for the last 2 years, and to date the Government have simply granted an extra allowance to maintain the figure @ €45,000. I believe this will occur again in 2026 – The Government has to continue to have measures to help Ireland meet its global warming targets/greenhouse gas emissions.

• Liquidate or sell your business. There are 2 fantastic tax saving opportunities available. The first is Retirement relief – if you are over 55, and not yet 70, you may make a capital gain of up to €750,000 totally free of CGT. If you are fortunate enough that you and your husband/wife are both directors and shareholders in your company this could allow you receive €1.5m free of tax. Certain other rules apply- talk to us to see if you qualify.

• Entrepreneur Relief is the second opportunity. This differs from 4 above in that the person need not be 55 or under 70. A person may sell their business for up to €1m and only pay CGT @ 10% on the first million. Normal CGT rules apply thereafter. There are strict criteria for this.

• Make your partner, if they are a director in your company “redundant”. Upon resigning as a director from a company, a director may be paid “Compensation for Loss of Office” (CFLOO). The tax rules attaching to this are the same as redundancy, so if a person had 10 years service they could be paid €17,650 or more in certain circumstances totally tax free.

• Employ your children (over 16) for the summer/during breaks from college. A child may be employed subject to certain restrictions. However, they may earn up to €20,000 p.a. and not pay any PAYE whatsoever. They may pay some PRSI and USC, but its relatively small. We don’t envisage them earning this level of pay if they are in secondary school or college but I’m sure they’d earn enough to pay their school or college fees. Note, students getting a grant to go to college need to be mindful of what they earn in a year, as they should ensure they don’t exceed the allowed earnings for the means test.

• Claim all of your entitlements on your private medical insurance policy. Most insurers websites are now really easy to use and you may reclaim a contribution to many medical procedures. An unusual option I came across on my own policy was a €50 contribution for membership of any sports club, per person on the policy. Then having claimed what you can, claim tax relief @ 20% on the balance or on any qualifying expenses that have not been reimbursed.

• If you are renting, claim the rent tax credit of €1,000 per person – so if you are a couple, the credit is €2,000 10. The old reliable – make pension contributions. If you do not require disposable income, making pension contributions is a really good way of decreasing your tax exposure. Talk to your pension advisor to see what limits may apply to you.

• The old reliable – make pension contributions. If you do not require disposable income, making pension contributions is a really good way of decreasing your tax exposure. Talk to your pension advisor to see what limits may apply to you.

The end of fixed monthly
VAT payments

Currently, a business may elect to pay a fixed monthly amount for VAT and then once per year, typically in January, file an actual return, and reclaim any overpayment, or more often than not, pay the balance due. Revenue have now decided to withdraw this facility from June 2025. If you are availing of this scheme, you will now have to file a 6 month return to June 2025 and pay any outstanding liability by 23rd July. You will then have to file bi-monthly returns commencing with July/August and pay the actual liability on 23rd September. This change may give rise to a large cash requirement for some clients in July. We advise you to examine your VAT liability to date and establish how much you may owe if any. If the figure is larger than you can afford, please contact us as Revenue will allow you enter into a Phased Payment Arrangement (PPA) over a period of up to 2 years to repay this amount, but ideally you should be able to discharge it from current cashflow.

Were you still on a tracker mortgage in 2024?

If you were, remember to check if your interest was more than you paid in 2022. If it was (and it is most likely to be if you were/are on a tracker) you may be entitled to a tax credit of up to €1,250 for 2024. If you did claim this in 2023, don’t worry, we will check the figures for 2024 automatically, and get you this refund, but will need your mortgage statement for 2024 to do this.

Here’s a reminder of the conditions you had to meet in order to qualify

Have a mortgage balance of between €80,000 – €500,000 on 31st December 2022. The interest paid in 2024 had to be greater than what you paid in 2022. A tax credit is then given @ 20% of this eg, if your interest charged increased by €3,000, you would get €3,000 x 20% = €600 credit against PAYE paid. The qualifying interest increase amount is capped @ €6,250. Therefore the maximum credit you could receive is €1,250.

Auto enrollment – further clarification comes to light

Auto enrollment is now scheduled to go live on 30th September. Some pointers for you:

Who does it apply to?

• Employees aged 23 – 60
• Earning over €20,000 p.a.
• Are not part of a pension scheme already

What are the rates of contribution for 2025

• The employee must contribute 1.5%
• The employer must also contribute 1.5%
• The Government contributes 0.5%

These rates will increase incrementally over the next 10 years. A key point to note, as in my opinion it has not been clearly stated to date – the employee cannot claim tax relief on any contributions under Auto Enrollment – the contribution by the Government is seen as sufficient incentive, it seems.

Paid sick leave update

On Wednesday 8th April the Minister for Enterprise, Peter Burke, confirmed to cabinet that the planned increase in statutory paid sick leave days from 5 to 7 has been deferred. This was influenced by research carried out by the ESRI that indicated the planned increase would have had led to 0.6% increase in payroll costs for the retail, food and accommodation industries who are already under severe pressure.