Natalie Kelly, Partner in our Audit & Assurance Department, featured in The Irish Times today discussing our sustainability initiatives.
Tax-payers who pay third level fees on their own behalf or on behalf of another person will be happy to know that they can claim tax relief.
Tax relief at the standard rate is available in respect of certain third-level tuition fees paid to approved colleges. Revenue publishes a list each year of both private and public colleges approved for tax relief. The relief is given by way of a tax credit equal to the fees paid multiplied by 20% (the standard rate of tax). A credit for third level fees cannot result in an income tax refund.
What is an Approved College?
Revenue have provided guidance on what constitutes an approved college. This is a college or higher education institute in the state which provides approved courses (definition below) or an institute in the UK or another EU Member state which is maintained by recurrent grants from public funds of any EU Member State. The college in either the Irish State, the UK or in an EU Member State must be a duly accredited university or institution of that country.
What is an Approved Course?
Revenue have also provided guidance on what constitutes an approved college course. A full-time or part-time undergraduate course must be at least two academic years. A postgraduate course leading to a postgraduate award based on a thesis or on the results of an examination or both, which is between one to four years and requires the student to have a prior degree or an equivalent qualification.
Who can claim & how much can be claimed?
An individual can only claim the relief if they themselves incurred the cost of the fees. Relief is calculated on aggregated fees paid subject to a maximum of €7,000 per person, per course, per academic year where the first €3,000 (full-time) or €1,500 (part-time) is deducted. The general effect of this is that claimants who are claiming for more than one student will get full tax relief for 2nd and subsequent children in their claim.
Relief does not extend to payments such as registration fees, administration fees or student accommodation.
If in receipt of any grant or payment towards the fees, this must be deducted from the claim being made when claiming the relief.
How to claim tuition fees?
There is no specific form required to claim relief for tuition fees paid for third level education courses. An individual can use PAYE services in myAccount to apply for relief for tuition fees by completing the Form 12 or if income tax registered can claim this through their yearly tax return.
Should you require any further information or assistance in claiming the tax relief, please contact us.
Update 20 October 2022:
Under the Finance Bill 2022 published today, the TBESS will be extended to include Case 2 trades, i.e. professional firms such as doctors, accountants, solicitors and dentists and new businesses will also be eligible for the scheme. The Government has also decided that where a business operates from more than one location, the cap will be increased from €10,000 to a maximum of €30,000 a month.
27 September 2022:
As part of Budget 2023, Minister for Finance, Pascal Donohoe, announced the introduction of a Temporary Business Energy Support Scheme to assist businesses with their energy cost over the winter months.
This new scheme will be open to businesses carrying on Case I trades, are tax compliant and have experienced a significant increase in their natural gas and electricity costs.
The scheme will be administered by the Revenue Commissioners and will operate on a self-assessment basis. Businesses will be required to register for the scheme and to make claims within the required time limits.
The scheme will operate by comparing the average unit price for the relevant bill period in 2022 with the average unit price in the corresponding reference period in 2021. If the increase in average unit price is more than 50% then the threshold would be passed and the business will be eligible for support under the scheme.
Once eligibility criteria are met, the support will be calculated on the basis of 40% of the amount of the increase in the bill amount.
A monthly cap of €10,000 per trade will apply, as well as an overall cap on the total amount which a business can claim.
The scheme’s payments will be backdated to September and run until at least February.
If you require any assistance with the new Temporary Business Energy Support Scheme, please contact Carol Hartnett, Manager in our Accounting & Financial Advisory Department.
Read our Budget 2023 Highlights and Budget 2023 Analysis.
The Tax Appeals Commission’s (TAC) objective is to fulfil the obligations placed on it by the Finance (Tax Appeals) Act 2015 and the Taxes Consolidation Act 1997 (“TCA 1997”). To fulfil these, the TAC facilitates taxpayers in exercising, where appropriate, their right of appeal to an independent body against decisions and assessments of the Revenue Commissioners and the Criminal Assets Bureau.
The Issue for Determination
Recently, the TAC issued a determination addressing an Appellant’s (taxpayer’s) assertion that a Notice of Assessment to Capital Gain Tax (CGT) for 2011, issued by the Respondent (Revenue Commissioners) on 4 December 2018, should not have disallowed his claim for retirement relief (S598 TCA 1997) and Company Amalgamations/exchange of shares relief (S586 TCA 1997) which he had claimed in his income tax return for 2013. The Revenue Commissioners had also issued a (related) Notice of Amended assessment to Income Tax for 2011 on the 5 December 2018.
The Background
In 1990, after many years of construction industry experience, the taxpayer set-up a building contracting company (the company) serving mainly local authorities and councils. He and his wife were the directors of the company. In 1997, his son started working for the company. 10 years later, with the taxpayer’s health in decline, he started the process of getting his son (the taxpayer’s son) to take over more of the running of the company. The taxpayer’s son’s wife also worked for the company in an administrative capacity. By 2011, the taxpayer contended that he wished to retire. A company was formed (HoldCo) of which the taxpayer’s son and his wife were the directors. The taxpayer sold some of his shares in the building company to HoldCo for €700,000. The balance of his shares and his wife’s share were transferred to HoldCo, for which they were issued 50% of the shares in HoldCo.
The €700,000 was not paid to the taxpayer until 2013. The taxpayer did not resign at any time as a director of the company nor was the taxpayer’s son ever appointed. The taxpayer and his wife continued to take undiminished salaries from the company until 2013.
In 2018, the company was audited by the Revenue Commissioners (with a view to examining the transaction now subject of this appeal) and it was the taxpayer who attended the audit meeting along with the taxpayer’s son’s wife.
Opposing Arguments
The Revenue Commissioners contended that at the audit meeting, the taxpayer said that nothing had really changed in the running of the business in 2011 compared to 2018. He also confirmed that the company’s office was in his house, he still effected payments from the company, but was only an adviser/mentor to his son since 2011. The Revenue Commissioners contended that they did not get a clear answer as to why the €700,000 payment was not made until 2013 but they believed that the company was not in a financial position to do so in 2011. While acknowledging that someone does not have to actually retire nor retire as a director in order to avail of retirement relief, it felt that on the “basket of evidence” the transaction was not entered into for bona fide commercial reasons.
On examination at the hearing, the taxpayer (and his son) outlined that the delay in the payment for the shares was to support bonds required for their construction contracts. They did not have any reason why the taxpayer’s son was not appointed as a director nor why the contact details on national websites, etc. were not updated. They also outlined that the taxpayer attended the Revenue audit meeting as he was the person familiar with the audit period being looked at.
Findings
The TAC in its determination considered all the information and oral evidence, and found as material facts that:
- The payment of €700,000, if it had been made in 2011, would not have been in the company’s interests
- The taxpayer retained effective control of the company post-2011 through his ownership and directorship
- In particular, the taxpayer retained financial and strategic control of the company
- The transaction was not made for a bona fide commercial reason and that it did form part of a scheme of arrangement with the main purpose to avoid tax (S586 (3)(b) and S598 (8) TCA 1997)
- Whilst the Revenue Commissioners were entitled to have issued their alternative Income tax assessment (per S817 TCA 1997), it was not necessary to consider it as the CGT assessment should be upheld in this case.
Determination
The Commissioner determined that the Revenue Commissioners assessment to CGT for 2011 in the amount of €348,112 should stand.
Delivering an €11bn Budget package, Minister Donohue described Budget 2023 as a ‘’Cost of Living Budget’’. With individuals, families and businesses struggling with both the effects of inflation and the effects of the current energy crisis, this Budget contained immediate one-off supports aimed to respond to the acute needs of all. With even stronger than expected tax receipts in 2022, the Minister had plenty of firepower to deliver a comprehensive set of financial supports and set the scene for significant future investments in public services such as housing, health, education and transport.
Income tax changes were mainly limited to a threshold increase to €40,000, above which the higher 40% rate of tax would apply. There were also small increases to the main income tax credits.
What was significant though was the Minister’s reference to the recent work of Tax Strategy Group and to it assisting Government as a roadmap for personal tax reform over the next number of years to include the possible introduction of a 3rd rate of Income tax and changes to the operation of USC and PRSI.
The Minister took the opportunity re-affirm Ireland’s commitment to the OECD-led reform of Corporate Tax and to acknowledge Corporate Ireland’s significant contribution to the Country’s national tax purse. As expected, the Minister announced a National Reserve Fund which is to be immediately funded with €2bn from “excess” Corporate Tax receipts, with a further €4bn committed for 2023.
The extension of the Knowledge Development Box (KDB) and improvements to the R&D Tax Credit regimes are also welcome as Ireland aims to stay competitive in the FDI space.
For the SME sector, a.k.a. ‘’the backbone of our domestic economy’’, the main offer of financial support came in the form of a Temporary Business Energy Support Scheme which will see businesses who have experienced a 50% increase in energy costs from 2021, reclaim 40% of the increase.
Welcome too were the extensions to the KEEP and SARP incentive schemes although many had been requesting far wider changes to the schemes to what has been decided.
Whilst it is likely that the one-off support measures will grab the media headlines, it is the discussion and outcome of a changing future tax base to fund public services that will have a more profound longer-term impact on our society.
View the Budget 2023 highlights here.
Minister Pascal Donoghue delivered his final Budget today, 27 September 2022. With inflation currently running at 8.5% and projected to be 7.5% in 2023, the so-called Cost of Living Budget was heavily focused on addressing rising energy costs. Below we outline the highlights of Budget 2023.
Enterprise/SMEs/Agri-sector
- Temporary Business Energy Support Scheme to assist businesses with their energy costs over the winter months. Open to businesses carrying on Case I trade, are tax compliant and have experienced significant increase in gas and electricity costs. Read more about the scheme.
- Extension of the KEEP scheme to end of 2025 with increasing the company limit to €6m.
- Special Assignee Relief Programme (SARP) extended to 2025 with minimum income limit up to €100,000.
- Section 481 Film Relief to be extended to 2028.
- Changes in the Research and Development Tax Credit and Knowledge Development Box (KDB) regime, with a company having the option to call for payment of their eligible R&D tax credit or to request an offset against other liabilities. The existing caps on the amount’s payable is to be removed. The first €25,000 of a claim will be payable in year one. The KDB is being extended a further 4 years to 2027. To comply with changes in international tax, specifically the Small Business Technology Transfer (STTR), there will be legislation changes for an increase in the effective rate of the KDB to 10%.
- Foreign Earning Deduction (FED) scheme to extended to end of 2025 and provides relief from income tax on up to €35,000 of income for employees required to travel out of the State to temporarily carry out duties of employment in certain qualifying countries.
- New 10% levy on concrete products.
- Accelerated Capital Allowances for the construction of modern slurry storage facilities whereby the cost will be written off over two rather than seven years.
- The Stamp Duty Reliefs for Young Trained Framers and Farm Consolidation are being extended to end of 2025.
- The Capital Gains Tax Relief for Farm Restructuring is also being extended to the end of 2025.
- Two special Stock Relief measures for registered farm partnerships and for young trained farmers being extended until the end of 2024.
Housing
- Vacant Home Tax charged at a rate equal to three times the property’s existing basic Local Property Tax (LPT) liability. It will apply to residential properties which are occupied by for less than 30 days in a 12-month period.
- Help to Buy Scheme will be continued until end of 2024 in its current form.
- A new Renter’s tax credit of €500 will be introduced and backdated to 2022.
- The relief for landlords for pre-letting expenditure will continue with an increase in qualifying costs up to €10,000 and the period of vacancy reduced to 6 months.
VAT
- The 9% VAT rate for the hospitality and tourism sector will cease in February, returning to 13.5% at this point.
- The 9% VAT rate of electricity and gas will be extended until 28 February 2023.
- Defibrillators, Hormone replacement therapy (HRT), Nicotine replacement products and period products will become VAT free.
- VAT on newspapers, including digital editions, will be reduced to 0% from 1st January 2023.
Personal Tax
- Small change to the second rate-band of Universal Social Charge which will increase from €21,295 to €22,920.
- Income Tax Standard Band will increase by €3,200 to €40,000, with the married single earner band increasing to €49,000.
- Personal, PAYE and Earned Tax Credits will increase by €75.
- Home Carer Tax Credit will increase by €100.
Other Measures
- Revenue will conduct a range of targeted projects to include PAYE compliance interventions involving a focus on share schemes and increased debt management.
Read our Head of Tax Services, Eddie Murphy’s analysis of Budget 2023.
At Crowleys DFK, investing in our employees is an investment in our future. Our policy is to nurture talent from within, by providing employees with the time and resources they need to pursue their professional development. As employees realise their ambitions, their growth becomes part of the firm’s growth.
To this end, Crowleys DFK has modernised its Competency Framework through the creation of a new Competency and Career Paths Development Framework. This will provide a diverse range of career progression opportunities for our employees, providing a clear guide for choosing a potential career path or for measuring progress down their current path. The aim is to offer multiple growth and career opportunities that align with employees’ strengths and interests, empowering them to move to higher level or specialist positions, or to discover entirely new roles for themselves.
To support this new framework, Crowleys DFK also has established a Learning & Development (L&D) Programme to ensure our employees always have the opportunity to learn. Over time, our learning culture gives employees the knowledge, skills and experience needed to become new leaders in the firm. This is a fundamental part of our overall Performance Development Programme and maintains an environment in which progress is a constant. Having found their pathway to the future in our Competency Framework, our L&D Programme will assist employees on their journey there.
Describing the career progression environment at Crowleys DFK, Managing Partner James O’Connor has said:
“I am very proud to see our new Competency Framework & L&D Programme come into effect. Our commitment to creating a learning and career progression culture is so important to us as a firm, that it is one of our core values. We know that the firm is successful only when our people are successful. With these developments, we can ensure that everyone is getting the opportunities they deserve.”
If you are interested in a career with us, please check out our careers for experienced professionals or our graduate programme.
Eddie Murphy, Partner & Head of Tax Services, outlines what to expect in Budget 2023.
Budget 2023 is being delivered on 27th September. This is a few weeks earlier than planned, demonstrating the urgency and seriousness of the cost-of-living crisis we are all facing.
A once-off financial package close to €3 billion is to be made available to help struggling households.
It is also expected that the income tax package in the budget will include increasing standard income tax rate bands to reduce the amount of income being taxed at the 40% rate.
This same budget must also encourage investment and future growth in Irish businesses. This can be achieved by strengthening and improving the Employment Investment Incentive Scheme and Entrepreneur Relief. For indigenous Irish businesses, these are key determinants and drivers of their initial and onward growth.
Budget 2023 is expected to contain short-term measures of financial assistance to individuals and businesses alike. However, the Government must continue to also look at the medium and longer term to ensure it continues to support both FDI and Irish SME businesses in their drive to create and grow sustainable employment in this country.
Stay tuned for our Budget analysis next week.
Do you have property in the UK, or are you about to acquire or have you recently sold property there? If so, you must comply with new anti-money laundering legislation for UK properties.
On 1 August 2022, the new Register of Overseas Entities, came into effect through the Economic Crime (Transparency and Enforcement) Act 2022.
Any overseas entity that wants to buy, sell, or transfer property or land in the UK, must register with the UK Companies House and declare the identity of their beneficial owners or managing officers before 31 January 2023.
Overseas entities that disposed of property or land since 28 February 2022 (when legislation for the register was first announced) are required to provide a statement to Companies House.
The register applies to property acquired in:
- England and Wales since 1 January 1999;
- Scotland since 8 December 2014; and
- Northern Ireland since 1 August 2022.
Failure to comply with these new obligations is a criminal offence and will lead to fines of up to £2,500 per day or a prison sentence of up to 5 years.
For further information, please Emma Dunne, Assistant Manager of Corporate Compliance.
In July 2022, the Protected Disclosures (Amendment) Act 2022 was signed into Irish law. This Act gives effect to an EU Directive regarding the protection of whistleblowers and serves to amend and extend the Protected Disclosures Act 2014. This Act has made several substantial changes to the laws relating to whistleblowing in Ireland, generally expanding both the protections available to whistleblowers and the responsibilities imposed on companies regarding whistleblowing.
New Definitions of Protected Disclosures
The Amendment Act significantly expands the range of activities or acts of wrongdoing which are relevant to the purposes of the act. Whereas the 2014 Act describes a set of practices which may be relevant, the Amendment Act provides a broad list of areas in which, should an individual consider wrongdoing to be occurring, a Protected Disclosure may be made.
The Amendment Act has also clarified and expanded the types of individuals who can claim its protections when making a Protected Disclosure. The 2014 Act provides a definition of the types of “workers” who can claim the Act’s protections; the Amendment Act expands this definition both by adding new types of workers and also by clarifying that the information subject to a Protected Disclosure need only to have come to light in a “work-related” context.
Protections when making a Protected Disclosure
Under the Amendment Act, the range of protections available to individuals making a Protected Disclosure has also expanded. In particular, the Amendment Act has made extensive changes to the laws relating to any penalties an individual who has made a Protected Disclosure may have suffered. The 2014 Act provided a range of activities which it considered to be unfair penalisations of individuals who have made a Protected Disclosure; the Amendment Act has increased this list of penalties to include acts such as the withholding of training, negative performance assessment, harm to the individual’s reputation, and others.
Significantly, the Amendment Act also places the burden of proof on employers to prove that, should an individual who has made a Protected Disclosure suffer any of these penalties, that the penalty has no connection to the Protected Disclosure.
Requirements of Organisations under the Amendment Act
Under the Amendment Act, any organisation with 50 or more employees is obliged to develop internal reporting channels and procedures to facilitate whistleblowing for their staff. These obligations extend to private section organisations. A provision in the Amendment Act states that, for employers of between 50 and 249 employees, all obligations under the Act will not come into effect until December 2023.
The Amendment Act provides specifications regarding how these reporting channels should operate. These specifications are quite extensive and include timeframes for responding to Protected Disclosures, the appointment of an appropriate individual to investigate the Disclosure, provision of clear information to staff regarding the operation of these channels, as well as effort to ensure the confidentiality of individuals who make Protected Disclosures.