Revenue scrap ROS online Amend Tax Return facility

Revenue have withdrawn their ROS facility to amend an income tax return online.

Back in September 2010, Revenue added a useful feature to their ROS site which allowed a user to amend online a previously-filed Form 11 Income Tax return.  At the time, I heartily welcomed this move and hailed it as ‘an important innovation’. In the intervening 20 months or so, I used it on a number of occasions, most commonly as a particularly easy way of claiming a tax credit or allowance that had been omitted from an original tax return.  I found the facility to be both useful and straightforward to use.

This morning I was reviewing the tax records of a client who had reached 65 years of age in late 2010 but hadn’t previously notified either myself or Revenue of this fact. He was therefore entitled to an Age Credit for 2010, along with PRSI exemption and partial Income Levy exemption for that year.

I accessed ROS to amend his 2010 tax return accordingly but I could not find any links to access the ‘Amend Form 11′ facility. A quick google search yielded a blank apart from my own blog post of September 2010 which outlined the steps involved in amending a return on ROS and a link to the relevant Revenue eBrief which was issued around that time.  I was dismayed to find the eBrief link was dead, bringing me to a ‘Page not found’ page within the Revenue.ie site.

Increasingly puzzled, I tried the ROS help section of ROS.ie and its ROS FAQ – Form 11 page which told me:

“Can I avail of ROS to file an amended Form 11?     
Unfortunately at this time if you have previously filed a Form 11, on either paper or through ROS, you will not be presented with the option of filing an amended return.”

Finally admitting defeat, I then had to resort to writing a letter to Revenue asking them to (i) update and amend my client’s 2010 Form 11 accordingly; and (ii)  issue a new Income Tax assessment including the Age Credit and exemptions. My letter has just gone off in the post. I expect that it will reach Revenue in 1-2 days time and they will presumably deal with it in due course. No matter how efficiently they manually process it, the service cannot match the speed and efficiency of the automatic ROS service.

I am disappointed that Revenue have withdrawn the facility to amend returns online via ROS, and it seems to be a retrograde step for everyone concerned.

It is doubly disappointing that they didn’t alert accountants and taxpayers of the move, choosing instead to merely delete the eBrief that had previously explained the feature. Maybe I’m expecting too much, but a fresh eBrief announcing the change would at least have made ROS users aware that the feature no longer existed – saving both their own and their clients’ time. Hopefully Revenue will reintroduce the facility before too long.

Medical Expenses – How to claim your Tax Relief

Did you know that you can claim tax relief on the cost of doctors bills, prescriptions, nursing home fees and other medical expenses?

This is one of the most valuable Income Tax reliefs around, and is easy and straightforward to claim. Yet, amazingly, each year many thousands of taxpayers never claim their refunds.

My new article for Contemporary Living magazine explains how you can avoid this expensive mistake.

Finance Bill 2012: Blaas, Bagels, Cricket & Tax Scams

Finance Minister Michael Noonan has today introduced the 2012 Finance Bill.  Its highlights include:  VAT cuts on bagels, blaas and other specialist bread products; tax relief for professional cricketers; new Revenue powers to combat serious tax scams, and a new self-assessment system for Stamp Duty.

The Bill gives effect to the changes set out in the Budget announced last December, and also contains a raft of technical housekeeping measures, in addition to the following key points:

INCOME TAX

Tax Relief on Third Level Fees

The tax relief on third level tuition fees is being curbed.  For full-time students, the first €2,250 in annual fees will not qualify for tax relief. For part-time students, the first €1,125 in fees is ineligible for relief.

Civil Partnerships

The Bill proposes two notable changes to the tax regime for civil partnerships. Legally binding maintenance agreements made on the breakup of a civil partnership will now be treated for tax purposes in the same way as those for married couples.

The second change will allow that following the breakdown of a civil partnership, where there is a  legally binding agreement, and the parties are still living under the same roof, they will enjoy  the same tax treatment as formerly married couples in similar circumstances.

Revenue Job Assist

Individuals who are signing for PRSI credits with the Department of Social Protection can now qualify for the Revenue Job Assist scheme. This scheme allows an individual to claim a partial tax deduction in each of the 3 tax years after they take up employment having been unemployed for at least 12 months.

Share-Based Remuneration

The Bill provides for the following changes to share-based remuneration: mainly affecting the I.T. sector.

• Where employees and directors have deferred the payment of income tax on share option gains due to a drop in the share price, half of any after-tax gain on the sale of the shares must now go to pay down the outstanding income tax liability until that liability has been cleared.

• Income levy and USC refunds may apply where shares are forfeited.

• An employer can now withhold or sell sufficient shares awarded to employees, to fund the income tax charge on that award of shares, before transferring the remainder  to the employee. This applies only where the employee fails to provide the employer with sufficient cash to pay the income tax charge.

Sportspersons’ tax relief

Professional cricketers can now on retirement avail of the sportspersons’ tax relief already enjoyed by other professional athletes. They can also qualify for a higher rate of relief on pension contributions.

CAPITAL ACQUISITIONS TAX (CAT)

The Group B (uncle, aunt, sibling, niece, nephew etc) CAT tax-free threshold is rounded up to €33,500 and the Group C (non-relatives) threshold rises to €16,750 with effect from Budget Day 7 December 2011

The annual pay and file date for CAT on Gifts & Inheritances is being moved back from 30 September to 31 October.

CAT Agricultural Relief

The three-year residence condition for CAT agricultural relief is being removed. This is in order to comply with EU Treaty provisions on freedom of movement of persons and capital.

A loan against a principal private residence will only qualify as a deduction for CAT agricultural relief purposes where the loan proceeds were used to purchase, repair or improve that residence.

Heritage Properties

The exemption from CAT on the gift or inheritance of heritage properties sold to State bodies will now include properties sold to cultural institutions funded by the Department of Arts, Heritage and the Gaeltacht.

STAMP DUTY

A self-assessment system will now apply to Stamp Duty is to be put on a self-assessment footing, in common with other taxes.

• A 30-day time limit will now apply to the stamping of a transaction.
• Revenue will have power to make Stamp Duty assessments, and new audit and appeal procedures will be introduced.
• The existing adjudication procedure will be abolished;

PENSION TAXATION

A number of changes are being made to relieve the often penal taxation that arises where the capital value of an individual’s pension benefits at retirement exceed €2.3 million (or a higher Personal Fund Threshold –PFT – if applicable).

RELEVANT CONTRACTS TAX

This Finance Bill gives legislative effect to the implementation of the new electronic Relevant Contract Tax (e-RCT) system from 1  January 2012.

REVENUE POWERS

The current general six-year requirement to keep business records will now also apply to liquidated and dissolved companies.

Payment Transactions Returns

Credit & Debit card merchant services and third party payment processors will now be required to make regular automatic returns to Revenue of all funds credited to traders. This is in response  to a suspicion that “some businesses may be underreporting card payment transactions.”

The penalties for deliberately or carelessly making incorrect income tax returns will now also apply to Domicile Levy and the Universal Social Charge returns

Tax Debts

A tax debtor may now be required to complete a statutory statement of affairs to demonstrate their ability or otherwise to pay debts to Revenue. Failure to do so will now be a Revenue offence. This is designed to stymie efforts by some debtors to hide assets in negotiations with Revenue.

Serious Tax Criminality

The Bill proposes extended Revenue powers to counter tax evasion and the black economy, focusing on serious Revenue offences. This includes oil laundering and cigarette smuggling, Relevant Contracts Tax scams, and major cross-border VAT and other frauds.

VAT

VAT on Bread

The range of breads eligible for Zero rate VAT is being extended to include loaves, rolls, batch bread, bagels, baps, blaas, burger buns, finger rolls, wraps, naan breads and pitta bread.

Other bread products which are reckoned to have “excessively high levels of sugar and fat” will remain liable for VAT at either the 13.5% or 23% rate. These include croissants, brioche and Danish pastries

VAT on Property

A number of minor changes are being made to the VAT rules regarding property.

• A reverse charge will now apply where construction services are supplied between connected persons.

•  Under the capital goods scheme, the adjustment period for ‘transitional properties’ will not revert to 20 years “where development has taken place and where that development constitutes a ‘refurbishment’ for VAT purposes”.

iXBRL FINANCIAL STATEMENTS

Corporation Tax returns can now include iXBRL (inline eXtensible Business Reporting Language) accounts.

The full text of the Bill is online, while the Dept of Finance Explanatory Memorandum and List of Items explain the changes in (relatively) plain English.

Budget 2012 Live Updates

Michael Noonan, Minster for Finance is now delivering his Budget 2012 speech to Dáil Éireann.

The Minister has announced the following Tax measures:

Corporation Tax

• No change in the 12.5% Corporation Tax rate.
• A special Assignee Relief Programme to attract multinationals’ executives to Ireland
• New Foreign Earnings deductions for individuals developing markets abroad
• International financial services sector boosted by measures to be announced in Finance Bill
• First €100,000 of Research & Development expenditure to be allowed for R&D credit.
• Corporation Tax exemption for new companies extended for a further 3 years.

Farming

• Farm transfers to the next generation are to be incentivised
• Significant fall in the rate of stamp duty for farmland and other commercial property
• Retirement relief for CGT to be modified – no detail of this measure included in the Budget Speech.
• Farm partnerships to be encouraged by 50% Stock relief for participating farmers and existing 100% Stock relief for young farmers
• The 9% rate of VAT to apply to Open Farms

Air Travel Tax

• Government are ‘prepared to negotiate’ with Aer Lingus and Ryanair to incentivise tourist routes into Ireland

Construction Sector

• Stamp duty for commercial property to be cut to 2% overnight – the previous top rate was 6%
• The current rates for residential property will apply
• CGT exemption for properties bought between tonight and the end of 2013 – if they are held for 7 years.
• Commercial properties – NAMA can now approve rent reductions in certain cases, even in cases where ‘upward only rent review’ clauses apply
• Those who bought homes at the end of the property boom will gain by an increase in mortgage interest relief to 30% for those homeowners
• First time buyers will get 25% mortgage interest relief for property purchases in 2012

Property Reliefs

• Detailed policy measures to be made in Finance Bill
• s.23 Reliefs to small scale investors will not be cut
• Surcharge of 5% will apply to sheltered income where one’s income is over €100,000

Income Tax

• No increase in Income Tax bands, rates or credits.
• Universal Social Charge to be changed to help low paid seasonal & temporary workers – the exempt income level rises from €4,004 to €10,036
• the USC will be collected on a cumulative basis in 2012

Value Added Tax

• The Standard rate of VAT will rise by 2% to 23%
• The other rates of VAT remain unchanged

Capital Taxes

• Capital Acquisitions Tax & Capital Gains Tax go from 25% to 30%
• Standard Exemption for Capital Acquisitions Tax (parent-child transfers) cut from €332,084 to €250,000

Investment Income

• Deposit interest retention tax (DIRT) increased from 27% to 30%
• PRSI will cover rental and investment income from 2013

Approved Retirement (ARF) Funds

• ARF ‘imputed distribution’ charge increased to 6%
• ARF tax on death of a child over 21 goes to 21%
• Citizenship condition on domicile levy is scrapped
• Carbon Tax goes up from €15 to €20 per tonne – a 33% increase. This increase does not apply to home heating oil or solid fuel.
• Double income tax deduction for Carbon tax for farming
• VAT Refunds on farm buildings will include wind turbines

Other

• The income tax relief on pension contributions remains unchanged – tax relief will remain at the marginal rate of tax.
• A household charge of €100 per household is being introduced. Certain limited waivers will apply.
• Motor Tax increases to raise €47 million
• A new export refund scheme will apply to exports of motor cars
• The existing tax exemption for the first 26 days of disability benefit per annum is to be abolished. The Minister described this as ‘an incentive for absenteeism’

Excise Duty

• Alcohol excise duty is unchanged.

 

 

 

 

Revenue extend Pay & File Tax Return Deadline

In a surprising move, Revenue have announced today that they have extended next week’s ROS online Pay & File Tax Deadline by 24 hours. The original deadline of Tuesday 15 November is now extended until midnight on Wednesday 16 November.

This new deadline covers the following

• online filing of Form 11 Income Tax Returns on ROS
• online payment of 2010 Income Tax liability
• payment of Preliminary Tax for 2011.

Today’s Revenue statement does not mention any extension to the deadline for making Pension/AVC contributions which qualify on a back-dated basis for tax relief for 2010. If you are considering making such a contribution in the coming days in order to obtain 2010 tax relief, I suggest that you do so by the original deadline of next Monday – at least until and unless Revenue confirm in the meantime that the pension relief deadline is also extended.

I have no idea why Revenue have at this late stage opted to extend the deadline by a day. Perhaps it is compensation of sorts for last week’s 31 October deadline for paper-filed tax returns, which fell on Bank Holiday Monday when Revenue offices were closed and many accounting and tax firms found themselves having to open on the Bank Holiday.

Either way, the deadline extension is very welcome, although it would have been simpler and easier for everyone concerned had this change been made months ago.  Spare a thought for your accountant or tax advisor if they have already made holiday or ‘quality time’ plans for Wednesday 16 November!

The ROS Technical Helpdesk will now be open until midnight on 16 November 2011.

15 November is ROS ‘Pay & File’ Tax Return Deadline

Revenue have confirmed that the 31 October 2011 Pay & File deadline for 2010 Income Tax returns is being extended for online returns to Tuesday 15 November 2011 . Curiously, this year’s deadline is a day earlier than last year’s deadline of 16 November 2010.

To avail of the extended deadline for 2011, an individual  (or their accountant) must file their 2010 tax return by 15 November 2011 using the online ROS system.  In addition, they must also use the Revenue online ROS system to pay the following tax balances by 15 November.

• Preliminary Tax for 2011;  and
• Any remaining Income Tax balance due for 2010

Unless both:

• the return is filed on ROS; and
• the required tax payment is made using ROS;

the existing deadline of 31 October 2011 will applies to both the payment and the return.

In accordance with existing practice, I expect that the extended 15 November deadline should also apply for the purposes of RAC, AVC and PRSA pension payments, where a taxpayer pays & files via ROS by 15 November.  This would enable such pension payments, made by 15 November 2011, to attract backdated tax relief against 2010 tax liabilities.  However, these arrangements will become not a reality until and unless confirmed by Revenue  in the meantime – certainly don’t take this for granted without double-checking between now and October.

Thankfully, the Revenue eBrief announcement makes no mention of the recent abortive plan by the outgoing FF/Green government to bring the annual Pay & File tax return deadlines a month forward. Some of us are still having nightmares over that particular bright idea.

Revenue abandon Lenihan’s Professionals’ Tax Plan

Revenue have today abandoned Brian Lenihan’s plans to tax employees on professional subscriptions and membership fees.

In an eBrief unveiled this evening,  Revenue confirm that most professional subscriptions will continue to be exempt from tax under Benefit in Kind rules.

This reverses the former Finance Minister’s announcement in last December’s Budget, that the existing Benefit in Kind exemption on these fees would be scrapped from January 2011. This would have meant that where an employer paid a professional membership or subscription fee on behalf of an employee, the employee would have faced a tax, PRSI and USC charge on the amount paid.

Today, Revenue confirm that the exemption will still apply

• Where the employee is required by law to be a member of a professional body, in order to carry out their work. This includes architects who (under the Building Control Act 2007) must be registered with the Royal Institute of the Architects of Ireland; and Health care professionals who are obliged by the  Health and Social Care professionals Act 2005, to be registered with the Health and Social Care Professionals Council.

• Where the employer requires the employee to hold a practising certificate or licence, eg accountants  working in professional practices.

• In certain other situations, where the employee is a member of a professional body which is relevant to their occupation.  This will cover accountants, engineers and others working in professional capacities in industry.

Revenue stress that the BIK exemption applies only where the professional subscription is relevant to the employee’s work. They cite practical examples to show that the exemption will not apply to a qualified architect who works as a HR manager, or a trained solicitor working as a media presenter.

The Revenue eBrief on this subject outlines 11 practical examples which illustrate how these rules will work in practice. Revenue also stress that Benefit in Kind PAYE, PRSI and USC must be charged on all cases not covered by the exemption.

I think this is a very positive move on Revenue’s part. The original plans to scrap this BIK relief were badly thought out, and a very poor appreciation of the much-vaunted ‘knowledge economy’.  It is nice to see Revenue taking action to restore this relief in most cases.

That said, I wonder would  such a u-turn have been politically possible if Mr. Lenihan was still Minister for Finance. Maybe it is time for his successor Michael Noonan to work alongside  Revenue in reversing some of the anti-business and anti-employment measures introduced in recent Budgets – several of which have proved in the meantime to be counter -productive.

Budget 2011 – Income Tax Credits and Bands

The following Income Tax Credits & Bands were unveiled in today’s Budget.

In general Tax Credits and Bands have been cut by 10%.

Income Tax Credits & Bands  – Budget 2011
	2011	2010
	€	€
Employee Tax Credit	1,650	1,830
Personal Tax Credits
- single	1,650	1,830
- married	3,300	3,660
Widowed person bereaved in year of assessment	3,300	3,660
One Parent Family Tax Credit	1,650	1,830
Home Carer Tax Credit	810	900
Dependent Relative Tax Credit	70	80
Incapacitated Child Tax Credit	3,300	3,660
Blind Persons Credit
- single	1,650	1,830
- married (both blind)	3,300	3,660
Additional credit for certain widowed persons	540	600
Widowed Parent Tax Credit:
year 1	3,600	4,000
year 2	3,150	3,500
year 3	2,700	3,000
year 4	2,250	2,500
year 5	1,800	2,000
Age Credit
- single	245	325
- married	490	650
Standard Rate Bands from 1 January 2011
Single/Widowed	32,800	36,400
Married One Income	41,800	45,400
Married Two Incomes	65,600	72,800
Max income transferable between spouses	41,800	45,400
One Parent/Widowed Parent	36,800	40,400
Age Exemption Limits
Single	18,000	20,000
Married	36,000	40,000

 

 

Budget 2011 Latest

The 2011 Budget has been announced by Brian Lenihan, Minister for Finance.

The key tax measures announced by the Minister in his Budget Speech are as follows:

• Income Levy & Health Levy to be replaced by a new Universal Social Charge.

• Tax Bands and Credits to be cut by 10%

• Nine tax relief schemes are to be abolished

• Restrictions on the carry forward of property-based capital allowances and Section 23 reliefs.

• Capital Acquisitions Tax tax-free thresholds to be cut by 20%

• D.I.R.T. tax increases to by 2% from 25% to 27%.

• Pension Tax relief employee PRSI & levy relief to be abolished.

• No change to 12.5% Corporation Tax rate.

• Employer PRSI relief on employer Pension contributions to be cut by 50%

• Business Expansion Scheme to be revamped & renamed – a new investment limit of €10 million will apply up to 2013.

• Accelerated Capital Allowances scheme for energy efficient equipment is to be extended.

• Major revamp of Residential Stamp Duty with a 1% flat rate on transactions  up to €1m, 2% thereafter. All current Residential Stamp Duty exemptions & reliefs to be abolished – changes apply from tomorrow 8 December, transitional arrangements for contracts in progress, once they are completed by 30 June 2011.

• Major changes to Relevant Contracts Tax with a cut from 35% to 20% for contractors with an established compliant tax record. Existing rate of 35% will continue to apply to other contractors.

• Travel Tax to be cut to €3 from 1 March 2011, subject to review at end of 2011.

• Excise Duty rises of cent per litre on petrol, 2 cent per litre on auto diesel, applying from midnight tonight.

• Internet betting to be subject to Betting Tax as applies to Betting Shops.

The Minister’s speech is now online.

The National Recovery Plan – Immediate Tax Changes

Following the publication of the National Recovery Plan on Wednesday, the Minister for Finance has clarified that the Tax Exemption for Patent Royalties, and the Approved Share Options Scheme have both been abolished with immediate effect, from 2pm on 24 November.

The other tax changes for 2011 arising from the Recovery Plan will be announced as part of the Budget on 7 December.