Pat Sutton of O’KellySutton Chartered Accountants and Strategic Business Advisors is pleased to see another Entrepreneurship initiative launched. The government announced a new national entrepreneurship development programme ‘New Frontiers’ in February 2012. It will be delivered at a local level through Institutes of Technology throughout Ireland.
It’s hard to believe how Revenue can get something like this so wrong, but they have. 115,000 letters have being dispatched to pensioners resulting in 20,000 worried pensioners contacting the Revenue helpline on Friday and Saturday past, with phone lines expected to be ‘busy’ again today when they reopen. So how did Revenue get it so wrong?
The fact is, in the vast majority of cases, no additional tax arises. So why were letters issued at all to these pensioners? The fact is, Revenue should have done their analysis and then issued any letters necessary.
I have being contacted by numerous pensioners over the past few days who showed me the Revenue letters they have received. Had it not being the fact that I am an experienced tax professional, from reading the letter I would have assumed they had a tax liability too! Take one pensioner who approached me with a letter stating that additional tax would be deducted from his occupational pension. The fact is he is tax exempt (less than €36k total income for married couple) so he doesn’t have any tax liability at all!! The letter should have stated that his tax credits and bands will be adjusted accordingly for his occupational pension.
Pensioners with concerns are:
• pensioners with other income of greater than €50,000. Revenue have stated that there are approx. 2,500 pensioners in this category and these will be dealt with on a case by case basis
• self employed (e.g. farmers) who are in receipt of state pensions. These individuals (or their accountants) may have omitted the state pension income in their tax return, and if this is the case, they will be guilty of making a false return.
For these individuals, surcharges / penalties / interest will follow not to mention a possible Revenue audit. They should immediately review their tax return and amend if necessary.
In the following, I have summarised the types of state pensions which are taxable and how they are taxed.
Individuals acting as company directors in 2011 are more aware than ever of the precarious nature of the role, given that many small to medium sized companies in particular are finding trading difficult. We at O’KellySutton Accountants are continually being asked to advise directors on best practice for good corporate governance. Corporate governance is relevant to directors of all companies. It is the term given to the way in which directors perform their duties in running the company. Smaller companies will not normally find it necessary to have as formalised an approach to corporate governance as a large company may require. In recent times, there is greater expectation with regard to the level of compliance of directors of all companies. Directors are well advised, therefore, to give careful consideration to the steps that they are taking to ensure that they are complying with company legislation.
Maternity Benefit – have you overpaid tax and PRSI?
Maternity benefit is not regarded as Income and should not be taxed. However, many employers make the mistake of over taxing their employees whilst they are out on maternity leave. This can happen if you continue to pay your employee their full wage as normal and recover the maternity benefit directly from the Dept of Social Protection.
For many SME’s and family businesses, dealing with banks has become a real challenge in 2011. As is common knowledge banks are under massive pressure trying to deal with the fallout from years of excess. Simply put they are short of funds, so have a real difficulty themselves. There are dealing with massive property related loan defaults and now trying to balance their books.
Beware – Revenue Commissioners are coming your way !
Over 90% of revenue audits are selected for a reason, meaning the chances of a random Revenue Audit is small. However recently Revenue are getting a lot smarter in their approach as we highlight with examples below;
New Relevant Contracts Tax (RCT) system to be introduced in 2012
Work is well advanced on developing a new system, which is expected to be introduced on 1 January 2012. It will be subject to a commencement order to be signed by the Minister for Finance.
These changes will affect all principal contractors and subcontractors performing relevant operations in the construction, forestry and meat processing sectors.
If you have ceased as a principal contractor you should contact your local Revenue district immediately to cancel your registration. If however, you are continuing to operate as a subcontractor, please advise your Revenue district that you are applying for cancellation as a principal only.
Launch of €5 million support programme by InterTradeIreland for companies working on all Ireland collaborative innovation projects
Level of investment provides vital financial support for SMEs to develop and commercialise innovative products and services
Collaboration is key to commercialising new ideas, according to Minister Sean Sherlock speaking at the recent launch of InterTradeIreland’s Innova Programme which offers up to €5 million to help companies benefit from all-island collaborative approaches to R&D. InterTradeIreland is seeking applicants for the 2011/2012 Innova programme which will support 18 collaborative projects with a funding package of up to €300,000 each.
“In the landmark decision delivered by Mr Justice Kevin Feeney on July 7th, the High Court ruled that the ERO system is unconstitutional. The judgment is far reaching and has ramifications not just for employees in the catering sector and other sectors governed by 13 EROs currently in existence, but the wider landscape of Irish industrial relations.
This decision clearly has ramifications for other sectors in the economy, including the contract cleaning, agriculture and hotel sectors, which are governed by the ERO system. The judgment will also impact on the constitutional challenge to the ERO system for agricultural workers which was launched by the owners of Coolmore Stud and Ballydoyle training facility in May.