Revenue confirm ROS Pay & File Tax Return Deadline is 14 November 2013

April 4, 2013

A Revenue eBrief today confirms that this year’s Pay & File deadline for 2012 tax returns is being extended for online returns from 31 October to Thursday 14 November 2013.

However, this is subject to some terms and conditions.

14 November 2013 Pay & File Tax Deadline

To avail of the extended deadline, you must, by 14 November next

  1. file your 2012 Form 11 Income Tax return using the online ROS system.
  2. make your ‘Pay & File’ payment via ROS, to cover:
  • your Preliminary Tax for 2013;  and
  • any remaining balance of Income Tax you owe for 2012.

The extended deadline only applies, if:

  • you file your Form 11 tax return on ROS; and
  • you use ROS to make the required Income Tax payment.

Capital Gains Tax

The Revenue eBrief makes no mention of any extension to the Capital Gains Tax return filing deadline of 31 October 2013.  If you pay Income  Tax under self-assessment, you must file your Capital Gains tax details as part of your 2012 Form 11 Income Tax Return.

The deadline for such ROS-filed returns may now extend to 14 November.

On the other hand, if you pay all your taxes under the PAYE system, and had a 2012 Capital Gain, you must file a Form CG1 Capital Gains Tax return by the earlier deadline of 31 October.

Capital Acquisitions Tax

The deadline extension also applies to Capital Acquisitions Tax (CAT) payments and IT38 returns for gifts or inheritances with valuation dates in the year ended 31 August 2013. Again,  return & tax payment must both be made through ROS.

Pension Payments

In previous years, the extended November deadline has also applied for the purposes of RAC, AVC and PRSA pension payments.

Today’s Revenue eBrief does not mention this particular issue although I expect that the 14 November deadline will again extend to such payments, where the individual pays & files via ROS by 14 November.

If you are considering making a pension payment in November and wish to claim the tax relief against your 2012 liability, you should first double-check that the extended deadline applies to pension payments.

Unless you are 100% sure,  it is safer to work on the assumption that the previous 31 October deadline applies, and to make any your qualifying pension payment by the end of  October.


The Unlucky 13 Highlights of Finance Bill 2013

February 13, 2013

The 2013 Finance Bill has just been unveiled. It gives effect to the changes announced in Minister Noonan’s Budget last December, along with a raft of technical and other measures.

Here are 13 of the key new measures outlined in the Bill:

Finance Act 2013

  1. Adoptive Benefit and Health and Safety Benefit payments will become taxable with effect from 1 July 2013. This is in line with the similar measure for maternity benefit payments, which was announced in the Budget.
    Adoptive Benefit is paid to an adopting mother or a single male who adopts a child, for the first 24 weeks following the placement of the adopted child.
    Health and Safety Benefit is paid to pregnant or breastfeeding employees who are granted leave on health & safety grounds.
  2. The Budget announced a maximum lifetime limit of €200,000 for tax-free employment termination or ex-gratia payments. This new limit will also apply to ex-gratia compensation payments made on account of death or disability.   However, this won’t impact on the tax-free status of statutory termination or compensation awards.
  3. The existing Foreign Service Relief is being abolished entirely for ex-gratia payments made on retirement or removal from office. This is apparently “to ensure that Ireland does not become a retirement tax haven”.
  4. Changes are to be made to benefits-in-kind tax legislation to ensure that public sector workers pay BIK on the same basis as their private sector counterparts.
  5. The legislation on Employee Benefit Trusts is being tightened to prevent employees from receiving tax-free loans from a trust provided or funded by their employer.
  6. The thresholds for tax relief on third-level fees are being increased along with the rises in the Student Contribution.
  7. There is good and bad news in relation to tax relief on donations of heritage properties.  The tax relief scheme is being extended to include donations of buildings, outbuildings, yards or land alongside a heritage property, and lands required for provision of access to,  and visitor parking facilities at, a heritage property.   On the other hand, the tax credit for heritage property donations is being slashed from 80% to 50% of market value.
  8. The Revenue Job Assist scheme is being abolished and will be replaced, at a later stage, by a new measure to encourage employers to hire long-term unemployed workers.
  9. Losses on foreign rentals can no longer be offset against other Case III income, eg government bond interest. However foreign rental losses will continue to be offset against foreign rental profits.
  10. There are a number of technical adjustments to the CGT relief on farm & business asset disposals by individuals aged 66 or over. This relief applies to up to €3m in qualifying assets, from 1 January 2014 onwards. The €3m limit is now a lifetime limit for all disposals from 2014 onwards.
  11. The Bill empowers Revenue to inspect a property to determine its value for CGT purposes.  This will apply to shares, antiques and other types of property.
  12. The “young trained farmers” Stamp Duty relief on agricultural land transfers will apply for a further three years to 31 December 2015.
  13. A number of additional conditions are being added to the  special 100% rate of stock relief for young trained farmers.

The Finance Bill itself, its Explanatory Memorandum, and List of Items are all now online.


Do You Have a Capital Gains Tax Bill This Thursday?

January 29, 2013

Don’t forget, this Thursday, 31 January is the deadline for payment of Capital Gains Tax on disposals in December 2012.

For more, see my recent blog post: https://mcgibney.ie/2013/01/10/31-january-is-capital-gains-tax-payment-deadline/

31 January is Capital Gains Tax Deadline Day

I strongly recommend that you seek professional advice and assistance if you think that you may have a liability to Capital Gains Tax.


Act Now to File Your UK Tax Return by 31 January

January 21, 2013

If you have UK source income, you may be obliged to file a UK Self Assessment tax return. 31 January is the deadline for filing your 2011/12 return online. This covers the year ended 5 April 2012.

If you are liable to file a return, and haven’t done so, you will need to act now in order to meet the deadline. If you miss it, you will face an automatic £100 penalty – even if you have no UK tax liability.

HMRC

Fail to file within a further 3 months (i.e., by 30 April) and you will be hit with an extra £10 per day; after six months, a further £300 (or 5% of your tax liability, if higher), and worse penalties still if you file even later.

If you think you may be liable to file a UK return, first check the criteria set out on the HMRC website.

In short, you will need to file a return if:

  • you had self-employment income in the UK (including Northern Ireland) in the year ended 5 April 2012.
  • you are a director of a UK company.
  • you have income from savings, investments or property in the UK.
  • you need to claim expenses or reliefs against UK PAYE income.
  • you sold UK property or assets in the year ended 5 April 2012 and have a UK Capital Gains Tax liability.

If you are liable, you will need to act swiftly in order to meet the deadline. This is especially so, if this is your first time to to register for UK income tax.  As a first-time HMRC filer, you will first need to obtain a 10-digit Unique Taxpayer Reference (UTR number)  from HMRC Online Services.

HMRC Online Services advise that you must register with them by today (21 January) in order to receive your UTR number ahead of the 31 January deadline.

If you would like us to file your UK return before the deadline, don’t delay, call us now.


31 January is Capital Gains Tax Payment Deadline

January 10, 2013

Thursday 31 January is the deadline for payment of Capital Gains Tax on disposals in December 2012. If you made a Capital Gain in December, you will need to calculate pay your Capital Gains Tax liability by 31 January.

Capital Gains Tax (CGT) is charged on

  • the sale of property or other assets.
  • other disposals, eg the gift of an asset to a relative or other third party,and
  • where insurance proceeds or another “capital sum” is received in respect of an asset.

31 January is Capital Gains Tax Deadline Day

On this occasion, you need to take special care to ensure that you apply the correct CGT rate in calculating your liability.

The Capital Gains Tax rate for the period from 1 to 5 December inclusive is 30% of the Capital Gain. An increased rate of 33%, applies on transactions from 6 December onwards, announced recently in Budget 2013 .

If you have a liability for December 2012, you must, by 31 January:

  • Calculate or estimate your liability.
  • Pay the liability by cheque or draft to the Collector General, FREEPOST, Francis Street, Limerick, attaching a CGT payslip which includes your name, address and PPS number
  • If you are registered on the Revenue ROS system, you can process your payment online (which I recommend) and even pay by credit card (which I don’t recommend).

If you expect to have a liability but don’t yet know the exact amount, you should still pay your best estimate by 31 January. To avoid interest charges, it may be wise to pay a little more than your expected liability.

When your Capital Gains Tax position is finalised (ie when you file a 2012 Income Tax Form 11 or Capital Gains Tax Form CG1 Return by 31 October 2013), Revenue will bill you for any shortfall or refund you any overpayment.

The Revenue.ie website includes some useful online guidance on Capital Gains Tax but I strongly recommend that you seek professional advice and assistance if you think that you may have a Capital Gains Tax liability.


This Saturday is Capital Gains Tax Deadline Day

December 13, 2012

Next Saturday, 15 December, is the deadline for payment of Capital Gains Tax on disposals in the period from 1 January to 30 November 2012. If you made a Capital Gain during this period, you must pay your Capital Gains Tax liability by Saturday, or face possible interest charges for late payment.

Capital Gains Tax (CGT) normally arises on the sale of property or other assets. However a liability can also arise on other occasions when an asset changes hands, for example when an asset is gifted or exchanged for another non-cash asset.

CGT can also arise in certain other situations where a capital sum (eg insurance proceeds) is derived from an asset.

Capital_Gains_Tax Deadline 2012

The rate of CGT for the period January-November 2012 is 30% of the Capital Gain. The increased rate of 33% announced in the recent Budget 2013 applies only to disposals after Budget Day, 5 December.

If you have a liability for January-November 2012, you must, by Saturday:

  • Calculate or estimate your liability.
  • Send a cheque or draft for that amount to the Collector General, FREEPOST, Francis Street, Limerick.
  • Attach to your payment,  a CGT payslip which includes your name, address and PPS number.

If you expect to have a liability but don’t yet know the exact amount, you should nevertheless pay your best estimate by Saturday. In order to avoid becoming liable for interest charges, I would recommend in such situations that you should consider paying a little more than your expected liability.

Therefore when you finalise your Capital Gains Tax position by filing an Income Tax Form 11 or Capital Gains Tax Form CG1 Return for 2012, Revenue will refund you the amount you have overpaid.

The Revenue.ie website includes some useful guidance on Capital Gains Tax but I recommend that you seek professional assistance if you suspect that you may have a CGT liability.


Budget 2013 – Some initial thoughts

December 5, 2012

Some of my initial thoughts on (a rather unimaginative) Budget 2013:

Local Property Tax

I predict that the new Local Property Tax will create much difficulty for the Government within the coming year.

While Revenue will provide “valuation guidance”, this is likely to be tailored more to their own objectives (ie, raise as much tax as possible) than those of the property owner (the opposite) and will not be a particularly appetising option. The alternative option to hire “a competent valuer” to value one’s property will rankle with many people, especially as auctioneers and valuers:

  1. will, (quite properly), charge a fee for their services.
  2. as a group, have a long record of overvaluing properties (one of the main contributors to the Tiger-era bubble)
  3. have a vested interest in renewed property price inflation.

NPPR €200 Property Charge

Given the mess that the local councils have made of collecting the Household Charge (HC) and NPPR, it is quite correct that the new tax will be collected by the Revenue Commissioners. However, as with the HC & NPPR, I think it is a serious error to make the owner, not the occupier, liable. Quite simply, I believe that people should be encouraged, within reason, to own their own homes and the property market is likely to remain in the doldrums if individuals and families are incentivised to rent rather than own their homes.

The €50,000 ‘bands’ for the property tax are too narrow and in my view are a temptation to evasion. A wider band, of €100,000 or €150,000 would have generated the same tax revenue with a lot less scope for undervaluation.

It seems that  a minimum rate of €90 will apply to properties valued under €100,000. This may be okay for someone living in a €100,000 property (which may be more numerous than the Minister expects, given the quoted prices on local and online property listing), but a €90 charge is scarcely justifiable in the case of a person living (or more precisely existing) in poverty in a semi-derelict, low value property.

Among the Property Tax payment options is the facility to pay in cash. This is rather  ironic in the light of Revenue’s stated determination to stamp out the cash economy and the government’s wider policy to move towards a cashless society.

The facility for voluntary deferral of the Property Tax entails an interest charge of 4% p.a.  This is not the highest interest charge on the planet, but given the fact that people who opt for deferral will only be doing so on the basis that they are already in straitened circumstances, the fact that they are facing an additional interest charge will only add to their woes.

It is good that the Household Charge is being abolished  from 1 January 2013, but it is an absolute, and gratuitous, disgrace that the NPPR Charge on non-owner occupiers will be charged for 2013 in addition to the Property Tax. Another example of double taxation.

Business

I predict that the much touted “10 Point Tax Reform Plan” for SME’s will make little or no difference to almost all firms.

Budget 2012 Business Reliefs

The 3 Year Corporation Tax Relief for Start Up Companies has already been significantly diluted in earlier Budgets, and I honestly see little point in continuing with it, except perhaps for political window-dressing purposes.

The €250,000 increase in the VAT cash receipts basis threshold  (from €1 million to €1.25 million) is indeed a welcome measure, as is the doubling of the “initial spend” eligible for the R&D tax credit (from €100,000 to €200,000).

However the extensions to the Foreign Earnings Deduction for work related travel will need to be dramatic if they are to be of any use to Irish businesses. The Budget 2012 measure which allowed for this Deduction to apply only for travel to Brazil, Russia, India and China was laughably restrictive.

News of a long-awaited diesel rebate for hauliers, to apply from 1 July 2013, is very welcome, but the devil will be in the detail.

I fear that the new “PlusOne initiative” to employ long-term unemployed workers will be more window dressing.  The Irish economy needs small businesses and sole traders to hire more workers. If every one of our 270,000 sole traders (as per 2010 figures) and many more small companies, employed one extra person next year, our unemployment problem would be well on the way to being resolved. However this is unlikely to happen and I fail to see the logic in telling a young graduate (or even a not-so-young non-graduate) that they must rot on the dole for 6 months before an employer can be incentivised to hire them.

Farming

The extension of the farmers’ 25% & 100% Stock Relief incentives is a perennial feature of almost every Budget.  Sadly this Budget contains little else for the agricultural sector. The Stock Relief concession for beef production farm partnerships, and the  new farmland Capital Gains Tax relief for farm restructuring purposes are welcome but will have limited impact.

Film Industry & Tourism

The Budget promises an extended Film Tax Relief Scheme until 2020, with a new “tax credit model” in 2016 which will replace the current ‘‘high earner’ investor-driven incentive. Again the devil will be in the detail.

The 9% VAT rate for the tourism industry will continue  in 2013, but will this survive post-The Gathering into 2014?

Property

The Property Tax exemptions for “new or previously unoccupied homes” by 2016, and for 2013 first-time buyers, underline what I see as the key structural problems of the Property Tax, ie discouraging first time buyers and others from buying or trading up. The exemption for residences in “unfinished estates” may prove controversial if this is applied in practice in a fashion as arbitrary as the corresponding Household Charge exemption. Some people living in luxury estates found themselves unexpectedly exempt from the HC on the basis that their estates included a couple of vacant sites or unsold homes, while their neighbours in less salubrious neighbourhoods had to stump up the €100 charge.

Pensions

The continuation of tax relief on pension contributions at the 41% marginal rate of tax is welcome and a small, if significant, victory over the reactionary voices calling for the effective destruction of pension cover for private-sector workers. The measure to curb the relief on on pension pots projecting income of over €60,000 per annum is a sensible one, as are the scrapping of the 2012 private pension levy after 2014 and the ending of the reduced USC charge for high-earning over-70s.

I remain unconvinced of the wisdom behind allowing individuals to withdraw up to 30% of their AVCs. Withdrawals will be charged income tax at marginal rates and I fear that many people will erode their long-term financial security in a desperate attempt to pander to unreasonable demands from their banks or other lenders.

Budget 2013

PRSI

The increase from €253 to €500 in the minimum annual self-employed annual PRSI contribution is a reasonable move, as such contributions are invariably good value for self-employed people, yielding a contributory old age pension amongst other benefits. However the increased cost will by its nature exclusively hit low-income self-employed people many of whom will have to cope with property tax and other financial pressures.

The abolition of the weekly €100 PRSI-exempt allowance for employees makes sense from a crude mathematical viewpoint,  but again will impact, disproportionately but not exclusively, on low earners.

From 2014, PRSI will apply to employees’ rental income, investment income, dividends and deposit interest. In my view this is long overdue, as it has already applied to the self-employed for many years.

Income Tax 

The only Income Tax measure mentioned in the Budget Speech relates to Maternity Benefit, which will be treated as taxable income from 1 July 2013. The question remains as to why Maternity Benefit remains exempt from the USC.

Excise Duties

There is a most welcome absence of the threatened increases on excise duty on diesel and petrol.

The excise duty hikes on beer, cider and wine will do nothing for our struggling hospitality sector in the year of The Gathering, and makes something of a mockery of the special 9% VAT rate on tourist enterprises.

Capital Taxes

The rises in the Capital Gains Tax (CGT) & Capital Acquisitions Tax (CAT) rates from 30% to 33%, and the cut in the CAT threshold, each make sense at first glance but ignore the fact that they both discourage property owners sell or gift properties. As Minister for Finance, Charlie McCreevy, sharply increased the revenue from both tax headings by cutting the rates to 20%. This experiment is worth repeating and might yield surprising results.