CRO to Introduce Digital Incorporation Certificates

August 8, 2016

The Companies Office (CRO) are to introduce Digital Certificates of Incorporation for all new companies formed from next month.

This follows their introduction last week of Digital Certificates of Business Names.

Certs of Incorporation Go Digital

A Certificate of Incorporation is an important document, essentially the “birth certificate” of each company.  It is often used to verify the company’s identity for the purpose of banking facilities and legal contracts.

As with the Business Name Certificates, each new Certificate of Incorporation will issue by email and will include a colour banner to confirm that it is an authentic digitally signed document.

Today’s CRO announcement doesn’t clarify whether it will still be possible to receive a paper Certificate of Incorporation. I presume they will address this issue in the coming weeks.


Business Name Certs Go Digital Next Week

July 26, 2016

The Companies Registration Office (CRO), which registers Business Names for sole traders, partnerships and companies, announced today that Business Names Certificates are going digital from next Tuesday, August 2.

The CRO will no longer issue paper certificates by post once they register a new business name. Instead, they will email it to the applicant as a PDF document.

logo

The present format of the Business Name Certificate will not change but each PDF certificate will include a colour banner at the top of the screen to confirm that it is an authentic digitally signed document.

This can then be circulated to third parties by email.

It is still possible to register a business name using a paper form, or online.


New Revenue Guide to eTax Clearance System

July 22, 2016

Last December, the Revenue Commissioners unveiled their new eTax Clearance system.

This new system enables (almost) all tax clearance applications to be processed online. For most of us, paper tax clearance certificates are now a thing of the past.

Instead a special code, known as a Tax Clearance Access Number, now issues to each successful applicant. They can then give this number, along with their PPSN/tax reference number, to a third party to verify their tax clearance status online.Tax Clearance SuccessIt’s important to note that your tax clearance certificate can be withdrawn without notice unless you remain tax-compliant and when you again become compliant, you’ll need to make a fresh application.

Revenue have now updated their FAQs (frequently asked questions) on how the new system works.

If you’re a PAYE taxpayer, you should use the myAccount service to apply for tax clearance.

If you’re self-employed or run a company, you can use ROS.

You’ll first need to register for myAccount or ROS.

If you’ve no computer or web access, you can still apply by completing a paper form TC1 and posting this to your local tax office or the Collector General’s office in Limerick.   You can also use this paper form if you’re a non-resident or representing an unregistered voluntary body.


Protect Yourself Against Tax Payment Fraud

July 15, 2016

I’ve only recently become aware of the Irish Tax Rebates service and know practically nothing about them, but they seem to be a highly reputable and professional company.

Still, I’m rather disturbed by their Facebook advert which shows a young lady holding a company cheque she received from them for her tax refund.

Irish Tax RebatesLady

You should never, EVER, allow the Revenue Commissioners to pay your tax refund to a middleman.

This is a basic protection against tax payment fraud and applies regardless of whether the middleman is a tax refund agency, another service provider, or even your trusted  accountant.

It’s far safer to have the taxman pay you, and for you to pay your accountant or agent fees separately.

Also, if you owe a tax bill to Revenue, you should always make your payment directly to Revenue. You should never, ever make a tax payment to an accountant, lawyer or other middleman.

It’s fine to give them a (preferably crossed) cheque made payable to the Revenue Commissioners or Collector General, but not one made out in their name.

Because if you do, and if they fail to pay it over to Revenue, all hell will break loose, and you could end up seriously out of pocket.

In the past, so many people have been badly ripped off by ignoring this basic rule.

Don’t risk becoming another victim of tax payment fraud.


Job Losses to Follow Taxman Squeeze on Sheriffs

June 17, 2016

Revenue have today announced an important change to the way they use Sheriffs to collect outstanding taxes.

Up to now, each Sheriff had a period of six months to collect the money owing on a warrant issued by Revenue.  This period has now been cut to three months.

Revenue curb Sheriffs

This change means that Sheriffs will now be much quicker to collect tax bills once a warrant has issued for them.

They will also have far less scope to allow individuals and businesses to settle bills gradually.

This is very bad news, particularly for the many businesses who experience short-term cashflow pressures and who occasionally are unable to settle their Revenue liabilities as they become due.

Although many people have a natural and terrible dread of having to deal with Sheriffs,  I have found over the years that they and their staff are usually very helpful, constructive and understanding in assisting taxpayers to manage and settle their debts to Revenue.

This change will inevitably put more pressure on Sheriffs to be the opposite.

It is bound to cause more business failures and job losses.

As if we didn’t have enough of both.

For more, see the new Revenue Guidelines for Sheriff Enforcement.


New VAT & RCT Guidance for School Boards

May 23, 2016

Revenue have issued new Guidance Notes for School Boards of Management on how Relevant Contracts Tax (RCT) and VAT affect school building projects and repairs & maintenance works.

Revenue Guidance Notes for Boards of Management on RCT and VAT.jpg

The RCT tax system applies to construction contracts where a principal contractor deducts tax from payments due to building contractors and tradesmen.

Since 2012, school Boards of Management have been counted as ‘Principal Contractors’ for RCT purposes.

Where a Board of Management undertakes construction works (including associated repairs or alterations to a building or structure), they  must operate RCT procedures on all payments to contractors.

In addition, they must file VAT returns, and make VAT payments in respect of VAT withheld under the Reverse Charge system.

There are serious penalties for failing to comply with these obligations, so school Boards should take special care to ensure that their VAT and RCT affairs are fully in order.

If you’re not fully certain of what exactly to do, avoid a potential nightmare by getting proper professional advice.

 


Tax on Rental Income – The Basics

April 14, 2016

Rental Income is taxable under the Irish tax system. For a given year, you can estimate your tax liability using the following formula:

Gross Rental Income  – Allowable Expenses – Capital Allowances = Taxable Rental Income x  Your marginal income tax, PRSI & USC rate = Your tax liability.

Tax on Rental Income.jpg

Allowable Expenses

You can deduct the following expenses in arriving at your taxable rental income.

  • Mortgage Interest paid “on monies borrowed for the purchase, improvement or repair” of the property (note the restrictions below)
  • Mortgage Protection policy premiums
  • Water rates, Ground rent, Service charges, Waste Collection charges etc
  • Insurance costs
  • Management & rent collection costs
  • Advertising Costs
  • Legal fees for drawing up leases or collection of unpaid rent
  • Accountancy fees relating to rental income
  • Repairs, decorating and general maintenance
  • Cleaning & related costs
  • Cost of any unreimbursed services or goods provided to tenants by the landlord i.e. electricity, heating, etc

Mortgage Interest – Restrictions              

Your mortgage interest deduction is restricted to 75% of the total interest you incur.

Mortgage interest is only allowed as a deduction against rental income on a residential property if you have complied with your legal obligations under the Residential Tenancies Act, including registering tenancies with the Private Residential Tenancies Board (PRTB).

It is generally not possible to claim for the following expenses:

  • Pre-letting expenses, apart from auctioneer’s letting fees, advertising fees and associated legal fees
  • Capital expenditure.

Capital Allowances

You can claim an allowance for Wear and Tear on furniture and fittings in your property.   This normally will cover such items as carpets, electrical appliances, central heating, furniture, etc.    The allowance is 12.5% per year, each year for 8 years.

Rental Losses

You can only offset a rental loss against other rental income, in current or future years.

It is not possible to offset such losses against other non-rental income sources (e.g. PAYE, business profits etc).

Self-Assessment Tax Collection

The tax due on rental income is normally collected under the Self-Assessment system. A  PAYE taxpayer with low rental income can arrange to have their tax collected via the PAYE system if Revenue agree to adjust their tax credits and standard rate cut-off point accordingly.