As the new year begins, many of the measures that Finance Minister Paschal Donohoe announced for Budget 2018 came into effect on January 1
These are the changes that kicked in from 1 January 2018:
- A €750 increase in the income tax standard rate band will mean that a single earner will be able to earn up to €34,550 before moving from the 20pc rate to the 40pc rate
- The entry point for the higher tax rate for married single-income earners has increased from €42,800 to €43,500
- Minimum wage has increased from €9.25 to €9.55
- The prescription charge for medical card holders aged under 70 has been cut from €2.50 per item to €2 and the monthly cap has been reduced from €25 to €20
- The 2.5pc USC has been reduced to 2pc
- The 5pc USC rate has shrunk to 4.75pc
- USC Bands are now as follows:
€0 to €12,012 - 0.5%
€12,013 to €19,372 - 2%
€19,373 to €70,044 - 4.75%
€70,044+ - 8%
- Earned Income Tax Credit has been boosted from €950 to €1,150
MERRY CHRISTMAS AND BEST WISHES FOR 2018 FROM ALL THE STAFF AT KBG ACCOUNTANTS
Our opening hours over the Christmas holidays are as follows:-
Closed from Friday 22nd December 2017
Reopening - Tuesday 2nd January 2018
Tax deadlines. Relevant dates for companies
14 December 2017
Dividend withholding tax return filing and payment date for distributions made in November 2017.
23 December 2017
Last date for filing corporation tax return Form CT1 for companies with a financial year ending on 31 March 2017 if filed using ROS.
Due date for any balancing payment in respect of the same accounting period.
Loans advanced to participators in a close company in the year ended 31 March 2017 may need to be repaid by 23 December 2017 to avoid the assessment (on the company) of income tax thereon.
A concessional three-month filing extension for iXBRL financial statements (not Form CT1) may apply. For 31 December 2016 year ends, this should extend the iXBRL deadline to 23 December 2017.
31 December 2017
Last date for filing third-party payments return Form 46G for companies with a financial year ending on 31 March 2017.
Latest date for payment of dividends for the period ended 30 June 2016 to avoid Sections 440 and 441 TCA97 surcharges on investment, rental or professional services income arising in that period (close companies only).
Contributions made by employers to approved occupational pension schemes are tax-deductible on a payment basis, as are charges on income (patent royalties and certain interest, for example). Companies with 31 December year ends may wish to review their positions to maximise or minimise deductions before the year end.
A two-year time limit applies to some corporation tax group relief and loss relief claims. Potential claims for the period ending 31 December 2015 may need to be considered prior to 31 December 2017.
Research and development (R&D) tax credits in respect of R&D expenditure incurred in an accounting period ended 31 December 2016 must be claimed by 31 December 2017. A similar deadline applies to capital allowance claims for intangible assets. Country-by-Country Reports must be filed with Revenue no later than 12 months after the last day of the fiscal year to which the Country-by-Country Reports relates.
Country-by-Country Reports for the fiscal year ended 31 December 2016 must be filed with Revenue no later than 31 December 2017.
Tax deadlines. Personal taxes
15 December 2017
Capital Gains Tax due in respect of any chargeable gains arising on disposals in the period 1 January 2017 to 30 November 2017 must be paid on or before 15 December 2017.
1 January 2018
0% rate of business in kind (BIK) commences in respect of electric vehicles for 2018. 31 January 2018 CGT due in respect of any gains arising on disposals in the period 1 December to 31 December 2017 must be paid on or before 31 January 2018.
General Tax deadlines
31 December 2017
Valuation date for 2017 domicile levy. Irish assets held on this date will be taken into account in ascertaining if the €5 million 'Irish asset test' has been met.
A four-year time limit generally applies to repayment claims. A claim for repayment of corporation tax for the year ended 31 December 2013 must generally be lodged with the Revenue by 31 December 2017. Claims for repayments of income tax for the year of assessment 2013 must also be submitted by 31 December 2017. Refund of DIRT for first time buyers (including self-builds) applies where the purchase/self-build is completed by 31 December 2017. Relief from stamp duty and capital gains tax on transfer of property rental business of an Irish Real Estate Fund (IREF) to a Real Estate Investment Trust (REIT) expires on 31 December 2017. 2% rate of stamp duty will apply to transfers of non-residential property where binding contracts were in place before 11 October 2017 and where the instruments for the transfers are executed before 1 January 2018.
1 January 2018
The minimum seven-year holding period required in order to avail of capital gains tax exemption on land and buildings purchased between 7 December 2011 and 31 December 2014 is reduced to four years. This applies to disposals of such assets made on or after 1 January 2018.
Farming for the future 23rd November
Mortgage to Rent Scheme (MTR)
The Mortgage to Rent scheme is a government initiative to help homeowners who are at risk of losing their home.
- The Borrower surrenders property to the Lender
- The Lender sells to an Approved Housing Body (AHB) for the open market value less value of necessary repairs
- The AHB rents to borrower who becomes a social housing tenant
- The tenant pays an income based differential rent
- There is an option to buy back the property after 5 years, if you can raise the finance
- If there is residual balance owed on the property after the sale to the AHB it is up to the borrower to enter into an arrangement with the bank regarding same.
3,794 cases for MTR have been submitted to date
293 of these have been completed
2,916 were ineligible
There are currently 12 lenders participating
- Pepper 116
- BOI 62
- EBS 31
- Shoreline 24
- Start Mortgages 17
- PTSB 14
- KBC 11
- Tanagers 10
- AIB 4
- Stepstone 3
- Haven 1
- Total 293
There are 10 AHB involved
The completed MTR involved the following AHB:
- Cluid 167
- Oaklee 64
- Tuath 42
- NEHA 12
- Carbery 4
- Tintean 2
- Respond 2
- Total 293
29% of completed cases have been in Dublin
There have been 6 completed cases in Cavan, None in Sligo, Roscommon, Mayo, Donegal
The reasons why applications have been terminated are mainly because
The property is not suitable for social housing
The case is not viable without a reduction in the open market value and this is not acceptable to the lender
No AHB is interested in the property
In order to increase the uptake on this scheme the Housing Agency is currently testing the concept of dealing with private companies in addition to AHB's. Under this, the private company would lease the property back to the State for a 25 year period. The problem raised here was what would happen to the Tenant after the 25 year period. There will be an update issued with regard to this concept in early 2018.
To qualify for MTR you must;
Qualify for social housing
Not be able to afford monthly mortgage repayments
Not own another property
In general, your property must be in negative equity. However, a property in marginal positive equity may be considered for inclusion in the scheme, if that equity is no more than 10% of the open market value, to a maximum of 15,000.
Your property must suit your needs you must not be over or under accommodated in accordance with local authority guidelines, plus two bedrooms
Depending on the type and location of your property, it must not exceed a certain value (increased in February 2017) as set out in the following table:
Your net household income must not exceed certain limits, depending on where you live in and how many adults and children there are in your household. The income limits for different locations and households are
Cavan is in Band 3
- Lender discusses MTR with Borrower
- The Lender issues an Unsustainable letter, MTR Application Form, Social Housing Application Form and a Property Questionnaire
- The Local Authority will process application forms within 20 days and issue a housing reference number which must be provided to the Lender
- Application is submitted to the Housing Agency (a government agency set up in May 2010) who carry out an independent valuation of the property. The Housing Agency issue a list of available properties to the AHB's on a fortnightly basis.
- If an AHB expresses interest, they assess whether repairs need to be carried out and submit an offer of OMV less the cost of repairs. There are no negotiations accepted.
- It is utimately up to the borrower to accept
- If accepted, a tenancy agreement is issued and continue to live in your home as a tenant of the Local Authority
- It is then up to the borrower to make an arrangement with the Lender regarding any residual balance that may be on the loan
BUDGET 2018 Summary of Key Changes
Income Tax Rates and Bands
There is no change in the standard rate (20%) and the marginal rate (40%) of Income Tax.
The standard rate band for a single person has been increased to €34,550 from €33,800 and to €43,550 from €42,800 for married one earner couples.
Universal Social Charge
The USC rates for 2018 have been changed as follows:
€0 to €12,012 0.5%
€12,013 to €19,372 2%
€19,373 to €70,044 4.75%
Income of €13,000 and under remains USC exempt. Self-employed income of over €100,000: 3% surcharge.
Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will now pay a maximum rate of 2% USC.
Tax Credit for Self Employed
The Earned Income Credit has been increased to €1,150 from €950.
Home Carers Tax Credit
The Home Carer Tax Credit has been increased to €1,200 from €1,100.
There has been no change to Employee PRSI or Employer PRSI.
NEW - Benefit-in-Kind on Electric Vehicles
A 0% benefit in kind rate is being introduced for electric vehicles for a period of 1 year in 2018.
Mortgage Interest Relief
Mortgage Interest Relief has been extended for owner occupiers who took out qualifying mortgages between 2004 and 2012 as follows:
2018 75% of existing relief
2019 50% of existing relief
2020 25% of existing relief
NEW - Pre-letting Expenses - Rented Residential
A new deduction is being introduced for pre-letting expenses of a revenue nature that have been incurred on a property that has been vacant for a period of 12 months or more. This deduction will be capped at €5,000 per property and will be subject to a clawback if the property is removed from the rental market within 4 years. This relief will be available for qualifying expenses incurred up to the end of 2021.
Corporation Tax Rate
The standard rate of Corporation Tax remains unchanged at 12.5%.
NEW - Key Employee Engagement Programme
A share-based remuneration incentive is being introduced for share options granted between 1 January 2018 and 31 December 2023. This scheme will facilitate the use of share-based remuneration by unquoted Small and Medium Enterprises ("SMEs") to attract key employees. Gains arising to employees on the exercise of KEEP share options will be liable to Capital Gains Tax (currently 33%) on the disposal of the shares, in place of the current liability to income tax, USC and PRSI.
NEW - BREXIT Loan Fund
The Departments of Business, Enterprise and Innovation and Agriculture, Food and the Marine will introduce a loan scheme of up to €300m that will be available at competitive rates to Small and Medium Sized Enterprises ("SMEs") - including food businesses to help them with their short-term working capital needs.
Capital Allowances for Intangible Assets
The deduction for capital allowances on intangible assets, and any related interest expense, for an accounting period will be limited to 70% of the relevant income arising from that intangible asset.
Accelerated Capital Allowances for Energy Efficient
The scheme of accelerate capital allowances for energy efficient equipment has been extended to the end of 2020.
CAPITAL ACQUISITIONS TAX
The rate of Capital Acquisitions Tax remains the same at 33%. There has been no change to the CAT Group A, B or C Thresholds.
Treatment of Solar Farms for Agricultural Relief
Agricultural land leased for solar infrastructure will be classified as agricultural land for the purposes of claiming CAT Agricultural Relief. For the purposes of this relief, the amount of farmland that can be so used will be restricted to 50% of the total farm acreage.
CAPITAL GAINS TAX
The standard rate of Capital Gains Tax remains the same at 33%.
CGT Relief for Certain Disposals of Land or Buildings
Section 604A TCA 1997 currently gives relief from capital gains tax for property purchased in any state in the European Economic Area between 7 December 2011 and 31 December 2014 where that property is held for more than 7 years.
This section will be amended to allow owners of qualifying assets to sell those assets between the fourth and seventh anniversaries of acquisition and enjoy full relief from Capital Gains Tax on any chargeable gains.
Treatment of Solar Farms for Retirement Relief
Agricultural land leased for solar infrastructure will be classified as agricultural land for the purposes of claiming Retirement Relief. For the purposes of this relief, the amount of farmland that can be so used will be restricted to 50% of the total farm acreage.
VALUE ADDED TAX
Retention of the 9% Reduced VAT Rate
The 9% VAT rate is being retained.
Increase in the VAT Rate on Sunbeds
The VAT rate on sunbed services is being increased from 13.5% to the standard rate of 23% effective from 1 January 2018.
NEW - Charities VAT Compensation Scheme
A VAT refund scheme is being introduced to compensate charities for the VAT they incur on inputs. The refund scheme will be introduced in 2019 for VAT incurred in 2018 with the level of refund due being calculated in proportion to their VAT costs based on the level of non-public funding they receive.
Increase of Stamp Duty on Non-Residential Property
The current rate of stamp duty on the acquisition of non-residential property is increased to 6% from 2% effective from Midnight 10th October, 2017.
NEW - A stamp duty refund scheme will be introduced for commercial land purchased for the development of housing subject to certain conditions, including a requirement that the relevant development is commenced within 30 months of the land purchase.
Extension of Consanguinity Relief
Consanguinity stamp duty relief will be maintained at 1 per cent for inter-family farm transfers for a further three years. /p>
VACANT SITE LEVY
The current 3% levy on vacant sites will be doubled from 3% in year one to 7% in year two and subsequent years.
The excise duty on a packet of 20 cigarettes is being increased by 50 cents (including VAT) with a pro-rata increase on the other tobacco products, and an additional 25c on roll your own tobacco. This will take effect from midnight on 10th October 2017.
NEW - Sugar Tax
A tax on sugar sweetened beverages is to be introduced effective 1 April 2018. This tax will apply to sugar sweetened drinks as follows:
Sugar Content Tax
5-8 grams per 100 ml 20c per litre
8+ grams per 100 ml 30c per litre
If you have any queries on how any of the above
may impact your business please contact us.
KBG add to their dynamic and experienced team says the Anglo Celt
Having taken on four new partners, Cavan and Longford based accountancy firm KBG's MARK REILLY talks to the Celt about surviving the downturn, preparing for the upturn, the team's gender equality ethos, and look forward to their 'Counting on You' project. "Quality of service and ensuring that you meet the needs of the clients," this is the mantra that Mark Reilly partner of KBG Accountants says was essential for building the business during a time of financial hardship.
That commitment by KBG to the needs of clients has seen it thrive in the last number of years having staved off the ravages of recession. KBG just announced they are to reward the diligence and hard work of four employees by appointing them partners in this exciting firm.
"We had three partners up to February 2017, now we have expanded that with the addition of four new names to our management team. Three ladies Siobhan Brady, Bernice Clarke and Louise Quinn with one male Francis Mulderrig are added to the existing team of Paddy Keavney, Ciaran Brady and Mark Reilly. Obviously, this is a major development in an accountancy firm the size of ours," Mark says of the latest development.
As a progressive, dedicated and hard-working accountancy firm KBG is a mid sized firm at the forefront of its profession. With offices in Cavan and Longford, not to mention a substantial online presence, they have built up a client base that appreciates the attention to detail and personal touch provided.
The KBG partner says their growth is down to the support of the clients.
"We don't use terms like 'company' or 'firm' here, we are all a team. We are all in this together. We reward people who contribute to our team. Accountancy locally has been a male dominated area, we are changing that. We have seven partners now, three of them are female. This move is about securing the future of the practice and rewarding loyal employees, who show great hunger, initiative and ability.
"Not everyone is cut out to be a partner and not everyone's personal circumstances allow for such a commitment. You need to have certain skill sets and our new additions have displayed their ability in bucketfuls."
Over the last number of years, KBG has given back to the community in a number of different ways. Sponsorship of GAA clubs has been the preferred method, but they are about to embark on a new initiative that brings a little fun into the mix.
"We are facilitating a charity event in conjunction with Pieta House. We have invited football clubs from Cavan, Longford and Leitrim to send two free takers, one male and one female, to participate in our 'Counting on You' competition in Gowna GFC on July 22. There is a 6,000 Euro prize fund. It serves a threefold
function of raising more awareness about Pieta House, getting our brand out there and providing sponsorship for the four winners for their clubs," Mark told the Celt.
This it the latest endeavour by the accountants to support local organisations.
"We have been synonymous with supporting football clubs over the last number of years. Each year we picked up to ten clubs to provide them with gear bags and training tops. That has worked very well over the last number of years. This is just something different for us to try.
"KBG will have some well known names, like the Mayo ladies football legend Cora Staunton, Monaghan star Jack McCarron and former Cavan keeper Alan O'Mara, all confirmed to attend. We are hoping that this will develop into an annual event," he explained.
The firm also boasts seven current footballers as part of its team including current Cavan star Gerard Smith, current Roscommon ladies starlet Bronagh McHugh and former Cavan sharp shooter Martin Dunne.
KBG has a dynamic and experienced team. Paddy Keavney (FCA) is the firm's founding partner. Paddy has over thirty years experience in advising clients on many aspects of commercial and financial management. Ciaran Brady (ACMA) joined Patrick Keavney & Co in 1993, which subsequently led to his partnership and to the formation of Keavney Brady & Co. Ciaran is a highly successful and respected member of BNI the world's biggest referral marketing organisation. Mark Reilly joined the firm in 1999. He obtained his Institute of Chartered Accountants qualification in 2003 and presently specialises in personal insolvency. Like all the partners he has a wide range of experience from assisting business start-ups to advising established business on sustainability
The new partners to join the team bring a range of talents that will be invaluable to the KBG client base. Siobhan Brady from Gowna, completed a BA in Accounting and Finance joined the firm in 2005. She is a Fellow of the Chartered Association of Certified Accountants and in 2015 she qualified as a Certified Tax Adviser (CPA). She runs the Longford office having set it up from scratch in 2007.
Bernice Clarke joined the firm in 2005 and qualified as a Certified Public Accountant in 2008. She has particular expertise in meeting the company secretarial requirements of clients across a variety of industries and sectors. She is very much involved in the local Cavan Ladies Business grouping.
Louise Quinn, from Aughawillan, Leitrim, is an Associate of Chartered Accountants Ireland and joined KBG in 2013 after working for a number of years with an accountancy practice in Dublin. She has extensive experience in all business sectors and works closely with clients to review their business and where necessary introduce changes to drive their performance.
Frank Mulderrig from Mayo is a Fellow of Chartered Accountants Ireland. After qualification he joined Grant Thornton Dublin where he specialised in Audit & Assurance and worked as Audit Manager. In 2007 Frank joined KBG Accountants as Audit Director and presently heads up the firm's Audit division. KBG boasts a broad client portfolio providing general practice services along with audit and assurance, business advisory, general business, corporate and tax advice, insolvency advice, to a wide range of clients.
The firm learned a lot of lessons over the last number of years. Many coming at considerable costs when the economy collapsed in 2007.
"We were heavily reliant on construction in the past, so when the boom turned to bust we were, like most other similar firms, badly affected. To sustain the viability of the business at the time tough decisions had to be made. We ended up losing some really good employees, we had to cut costs and become leaner and more efficient as a business. Not just builders, but architects, plumbers, groundsmen, tilers and electricians, but indirectly retailers and many other sectors suffered - the downturn really affected us and our clients. We lost a lot of very experienced people, but the model we had could not continue."
Mark says that there has been a palpable change in the economic temperature in recent times.
"We saw an upturn in the economy in Dublin in September 2013. It is slowly coming back in many sectors locally. For example, there were recent planning applications for a substantial housing development in Virginia. That is the first time in 10 years," he told the Celt.
"We are back up to similar numbers employee wise, however KBG's client spread is much better across the different sectors. There is no dominant sector, so hopefully we are better equipped to deal with any downturn. Our portfolio covers everything from the person with a small rental house in a rural area to a firm that is exporting up to 50m of goods a year and everything in between. We work with farmers, publicans, retailers, beauticians, grocers, entrepreneurs, doctors, dentists, solicitors, anyone who needs financial advice. We have a very broad client base," the accountant outlined.
The most attractive feature of the KBG model is the range of specialised skills they offer to clients. Mark believes that by offering specific services they can better meet client needs.
"We can do this by the level of service we provide and the technical expertise we have. We have an in-house tax consultant, Fionnuala Tobin who specialises in Succession Planning, Corporate Cash Extraction methods and various methods of reducing tax liabilities for large and small entities. She deals with all taxes and keeps herself fully up to speed with all changes and new ideas to help clients.
"Our specialised audit department is a first locally. Also Paddy Beirne a native of Drumshanbo is our in house qualified forensic accountant, dealing with loss of earnings claims, and all other cases requiring a more detailed eye. A qualified financial advisor is available and I am a personal insolvency practitioner. We have the interest, experience and hunger to help our clients. All these go toward meeting our clients needs in this changing country."