February 2, 2017
Revenue have just published the official 2016 average foreign currency exchange rates which should be used to convert foreign currency amounts in 2016 tax returns.
You should use these rates when converting to Euro, any income (whether from trading, rental, employment, investment or other sources) which is denominated in Sterling, Dollars or other currencies.
The rates are based on average Central Bank exchange rates throughout 2016. These, and the corresponding rates for earlier years, are as follows:
Average Market Mid-Closing Exchange Rates v. Euro
|British pound Sterling
Unsurprisingly, the 2016 rate for the British Pound reflects its fall after the Brexit referendum vote last June, but note that it’s still only marginally higher than the corresponding figure for 2014, and it’s actually lower than the 2013 figure.
A special rate applies for conversion of Lloyds Account amounts from sterling to euro.
This is based on the sterling mid-closing rate on the last market day of each calendar year, as per the Central Bank. The rate for 2012 is Stg £1 = €1.16798.
The new Revenue eBrief publishing these details is here.
January 4, 2016
If your business employs staff, don’t forget that the National Minimum Wage increased on 1 January 2016.
The standard minimum wage for an experienced adult employee is now €9.15 per hour.
Lower minimum wage rates apply to employees under 18 years old and to those who have recently turned 18.
The minimum wage for a worker:
- under 18 is €6.41 per hour (70% of the adult minimum wage).
- in their first year of employment since their 18th birthday is €7.32 per hour (80% of the adult minimum wage).
- in their second year of employment since their 18th birthday is €8.24 per hour (90% of the adult minimum wage).
Apprentices & Trainees
The new minimum wage rates for an apprentice or other trainee are as follows:
- First one-third of training course €6.86 per hour (75% of national minimum wage rate)
- Second one-third of training course €7.32 per hour (80% of national minimum wage rate)
- Final one third of the training course €8.24 per hour (90% of national minimum wage rate).
If you employ staff, it is your responsibility to ensure you are complying with the updated minimum wage law, by paying all staff members at least the applicable minimum wage.
The WorkplaceRelations.ie website answers many of the key Frequently Asked Questions on how the minimum wage works.
If you have any doubts on any aspect of how the minimum wage works in practice, I recommend you obtain professional advice.
December 16, 2015
Revenue have today issued a short guide to the new Earned Income Tax Credit which comes into effect from 1 January 2016.
The Credit is worth a maximum of €550 per year.
It applies to self-employed individuals and entrepreneurs as well as to owner-directors whose salaries don’t qualify for the normal PAYE employee tax credit of €1,650.
If you are entitled to claim both the Earned Income and Employee Tax Credits, your combined claim for both is capped at €1,650.
The Earned Income Tax Credit can be claimed, where appropriate, by both spouses.
It does not apply to rental, investment or other “passive” income.