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Revenue have withdrawn their ROS facility to amend an income tax return online.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I am disappointed that Revenue have withdrawn the facility to amend returns online via ROS, and it seems to be a retrograde step for everyone concerned.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

Less Frequent Business Tax Returns on the way

Revenue have this week announced that more small businesses will be qualify for reduced frequency VAT, PAYE/PRSI, & RCT tax returns and payments in 2012.

With effect from 1 January 2012, businesses whose annual VAT bills are less than €3,000 will only be required to file VAT returns and pay VAT liabilities every 6 months. If their annual VAT bills are between €3,000 and €14,400, they will file and pay every 4 months.

In addition, employers and contractors whose annual PAYE/PRSI or RCT liabilities are less than €28,800 will be eligible to make quarterly P30 & RCT30 returns and payments.

Revenue state that this will mean improved cashflow and less form-filling for eligible businesses.

They will soon be writing to businesses that they believe to be eligible for these new arrangement. If you don’t hear from them, but feel that your business should be eligible, (for example due to falling turnover), you should get in touch with Revenue before the end of December.

Plain-paper P60 Forms now online

Revenue have today published approved-format P60 templates which allow employers and their accountants to print P60s for employees. They confirm that they will no longer issue P60 stationery to the public.

A MS Word version of the P60 is here, while a ‘laser’ version (presumably for use with laser printers) is here.

The new format P60 reflects two notable changes :

• A separate Certificate is no longer needed to confirm USC details, as these are included in the P60 form. In 2009 & 2010, employers had to issue their employees with separate Income Levy Certificates, in addition to their P60′s. Thankfully this duplication of paperwork is no more.

• Up to now, it was necessary to issue P60s in duplicate, one part of the form to be used for tax purposes, the other for PRSI & social welfare purposes. It appears that the new single-page form will be adequate for both purposes.

2011 Form CT1 Corporation Tax Return now online

Revenue have today unveiled the ROS Form CT1 Corporation Tax Return for 2011.

For the first time ever, this year’s CT1 return includes an an optional facility to pre-populate the tax return with data extracted from the company’s CT1 tax return for 2010. This useful feature is included in both the ROS on-line and ROS off-line applications.

Online CT1 filing is now compulsory for most companies from 1 June 2011. Revenue have now also published a downloadable pdf-format paper CT1 return to facilitate the remaining companies who are still permitted to file paper returns.

Thankfully Revenue have now ceased the wasteful practice of mass-producing paper CT1 returns, most of which ended up in recycling bins.

For more, see todays Revenue eBrief on the 2011 CT1 return, and the recent eBrief on mandatory e-filing.  Revenue have promised to publish soon a further eBrief on how to use the pre-population facility on the new CT1 tax returns.

Revenue Unveil Measures to Tax Pension Lump Sums

Revenue have today unveiled new arrangements for taxing retirement pension lump-sums in excess of €200,000.

The 2011 Finance Act included a provision, Section 19 (4)(b), to ensure that an individual’s maximum lifetime retirement  tax-free lump sum is limited to €200,000. This applies from 1 January 2011 onwards.

In calculating the tax-free amount, any earlier lump sum received since 7 December 2005 is also taken into account.

The remainder of the lump sum(s) is now taxable. This is to be taxed in two stages:

• The portion between €200,000 and €575,000 is taxed at the standard rate (20%) under Schedule D Case IV.  The taxpayer may not utilise any reliefs, allowances or deductions against this portion.
• Any additional amount over €575,000 is taxed at the individual’s marginal tax rate. This element is counted as ‘profits or gains arising from an office or employment’ and will generally be subject to PAYE at source.

Revenue have today issued a new Form 790AA, which is to be used by pension administrators to notify Revenue of ‘Case IV’ tax deducted in accordance with the above procedures.

The Revenue eBrief on this matter is here.

VAT Refund Scheme boost for Farmers

Ireland’s farmers received a welcome boost today as Revenue announced an extension to the VAT refund scheme for farmers.

Farmers who are not VAT-registered can reclaim VAT paid by them on:

• farm buildings
• fencing and other fixed structures
• land drainage and
• land reclamation

 

Today, a Revenue eBrief confirms that that VAT refunds may now be claimed in respect of

• Concrete underpasses,  installed to facilitate the movement of livestock beneath a public road.
• Hedgerows planted by a farmer for the purpose of stock proofing. This does not include hedgerows grown for decorative, ornamental or domestic shelter purposes.
• Ploughing and re-seeding works completed as part of a land reclamation project.

 

Eligible farmers can claim VAT repayments on Form VAT58 in accordance with the  Value Added Tax (Refund of Tax) (No. 25) Order 1993, which is also online. Farmers may claim VAT refunds within four tax years of incurring the relevant expenditure.

Please note that this scheme does not apply to VAT-registered farmers, who may reclaim VAT on their regular VAT returns but are subject to VAT on sales of farming produce and livestock.

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.

Revenue’s USC Guide is now 38 pages long!

Revenue have now updated their frequently asked questions (FAQ) on the Universal Social Charge (USC) in an attempt to address a seemingly endless sequence of queries that have arisen in relation to this charge

Among the issues now covered by the FAQ are:

• Clarification on the application of the USC to medical card holders.
• How the USC is calculated for self-employed high earners who also have  PAYE income.
• How the USC affects over 65′s with DIRT-exempt interest earnings.

What I find most interesting about the FAQ is the fact that it now extends to a mind-boggling 39 pages!

When former Minister Brian Lenihan introduced the USC in his Budget Speech last December, he said he wanted “to move steadily in the direction of an income tax system that is fair, universal in its application and more easily understood”.

Three months later, with Mr. Lenihan is out of office, the ‘easily understood’ USC is proving so complicated that it now warrants a 38-page Revenue document to explain how it works in practice.  This fact alone would suggest to me that the USC has been an abject failure.

In fact, I believe that much of the current public resentment about the USC stems from the fact that people just don’t understand it.

The new Minister, Michael Noonan, and his officials should scrap the USC, and adjust income tax rates and credits  in order to achieve the same outcome.

Contractors – Renew 2011 Payments Cards Now!

Contractors in the construction, forestry and meat processing trades must observe Relevant Contracts Tax (RCT) on payments to subcontractors.  If a contractor holds an RCT Payments Card for a subcontractor, they can make payments to the subcontractor without deducting tax, otherwise 35% tax must be deducted on all payments, and paid over to Revenue.

Payments Cards are renewable annually and contractors who currently hold 2010 Payments Cards for subcontractors, should now apply to Revenue as soon as possible to renew all such Payment Cards for 2011.

All payments to subcontractors must be paid net of 35%  unless the contractor making the payment holds a current RCT Payments Card for the subcontractor. This applies even if the subcontractor holds an up-to-date C2 certificate.

All 2010 Payments Cards expire on 31 December 2010 and it is up to the contractor to apply for new payments cards for 2011.

Form RCT46A can be used to renew a 2010 Payments Card for an ongoing contract, while Form RCT46 may be used to apply for a Payments Card for a new subcontractor.

There are heavy penalties for non-operation of RCT on subcontractor payments, and failure to observe RCT rules can cost contractors dearly.  Therefore, contractors should take extreme care to ensure that they are in full compliance at all times.

16 Nov. ROS deadline applies to Pensions Relief

Chartered Accountants Ireland have confirmed today that the deadline for paying Pension Contributions that attract backdated tax relief for 2009 is extended from 31 October to 16 November. This applies where an individual has filed their 2009 Income Tax return by 16 November, and paid any 2009 tax balance via ROS by the same date.

In a statement issued  today, Chartered Accountants Ireland stated  “Following a request for confirmation from our members, we wish to advise all readers that where a taxpayer qualifies for the extended ROS Pay & File deadline of 16 November 2010, this extended deadline also applies to RAC, PRSA and AVC contributions.  Readers are reminded that in order to avail of this extended deadline, both the return and the payment must be made online.  Where only one of these actions is completed through ROS, the extension will not apply.”

As yet I don’t have a link for the statement but I will add this when it is online.