Enhanced Reporting Requirements (ERR) deferred

Following on from the constantly deferred Pension Auto Enrolment, Revenue have now decided to relax the enhanced reporting requirements by a further 6 months until 1st January 2025. I think this is ridiculous – all of our clients have already implemented and adhered to this new regime. We went through the pain of adopting the new rules, and now its deferred because probably the most non-compliant tax payers complained and lobbied.

Increase in revenue
‘desktop audits’

Over the last few months we have experienced a significant increase in Revenue sending exploratory letters to clients. The letters tend to seek information or back up in relation to Mileage & Subsistence claims, other travel expenses and BIK on cars in particular crew cab type vehicles. Another trigger of Revenue audits has been the identification of undeclared bank accounts most commonly Revolut. Some people believed Revolut was beyond the Revenue’s grasp. We assure you it and other similar on-line foreign banks are not. If you have any concerns in relation to any practice you may have or had in your business, please give us a call to discuss.

Save Tax… Switch to a PRSA

Recent changes in pension legislation now make PRSA’s for directors of limited companies more attractive than the traditional executive type pension. The prime advantages of a PRSA over an executive pension are:

1. While the maximum fund remains at €2m, the amount a person may invest is
   no longer tied to salary, age or length of service.
2. This means a person may shelter an almost unlimited amount of profits in any year,
   and boost their pension.
3. There are no limits on what a person may invest in property through their PRSA, whereas it is restricted to 50% of the pension value in the case of a pension.

Electric Cars – still tax efficient

While the second-hand value of many electric cars suffered a severe decrease in value in recent months, buying an electric car through your business is still very tax efficient. With the advent of large volume Chinese car makers such as BYD and MG, entry prices are now from €32,000 net of grants etc. More established manufacturers are also introducing lower priced models or dropping the retail price of existing models. Currently no BIK is payable on an electric car with a list price less than €45,000.
This is due to drop from January 2025, but this was also due to drop in January 2024,
and the Revenue delayed implementation of this due to lobbying by the car industry and accounting bodies.

Is a holding company for you?

A holding company facilitates the payment of tax-free dividends from a trading company to a holding company. This may include profits not required for working capital which ensures that they are not at the risk of claims against the trading company.
The directors of the holding company then have more privacy in how they utilise these funds. Holding companies may buy property and other investments such as shares etc. Normal taxation rules then apply on these investments – i.e. 40% tax on rental profits, and 33% tax on a capital gain. In certain cases, the sale of a subsidiary is free from capital gains tax. A holding company can be created above a trading company if required and we are happy to assist with this. Holding company’s may be formed for less than €500 with annual accounting fees as low as €1,000. If you wish to further explore if this may suit your circumstances, please do not hesitate to contact us.

Income tax return 2023 –
it’s never too early

As we enter the summer, business activity often slows down for a number of our Dublin based clients, particularly in retail and restaurants, as the exodus from the capital to the sunnier south east begins. If this is your experience, why not send us your income tax return data for 2023 now. Common contributors to tax refunds for 2023, of those we have already filed are: Mortgage interest relief for those who incurred a significant increase in their mortgage interest rate in 2023 (this applied to a huge amount of tracker mortgage clients), a refund of up to €1,250 is available. Rent relief – a credit of €500 to €1,000 (couples) is available in 2023 and it may be claimed in relation to a child you paid accommodation for while attending college. Clients who got married or who ceased work in 2023, or were out of work for a short period. Clients who incurred significant medical (including IVF treatment) or dental treatment. Please note in certain circumstances travel and accommodation if incurred in relation to medical treatment may be allowable against tax also.