PRSI Rate Reduction

PRSI RatesFrom the first of July the rate of employers PRSI will be halved to 4.25%  for individuals earning less than €356 per week. This new rate of employers PRSI will remain in place until the end of 2013 . This in my opinion is not enough. A tax on creating jobs is always a bad idea but I can’t see employers PRSI going anywhere soon.

 

Allowable expenses against rental income

Rental Income

When preparing tax returns I often have to remind my cli

ents that they may not be claiming for all allowable expenses against their rental income.

I have  prepared a checklist which may assist landlords in ensuring they are claiming for everything they should. Remember all expenses should be wholly and exclusively for the business purpose and not of a capital nature.

  • Accountants Fees (For preparing rental accounts)
  • Advertising fees for advertising the property. (Invoice from Daft or a local newspaper)
  • Rates and levies (Water rates are often missed)
  • Repairs (These should not be of a capital nature)
  • Refuse charges
  • Insurance on the property
  • Management fee’s (Example the actual cost of collecting the rent)
  • Services paid for by the landlord (Examples: Gas, Electricity ect)
  • Wear and tear on fixtures and fittings (Example: Carpet, cooker, central heating)
  • Maintenance Costs (Landlord can not charge for her own time so its worth while paying someone to cut the grass or clean the apartment in between tenants!)
  • Interest paid on loans to purchase, repair or improve the property. (75% allowable, Everyone claims for their mortgage interest but a lot of landlords forget to claim for the interest on loans the may have on repairing the property)
  • Legal fees to cover the drawing up of leases or the issue of solicitors letters to tenants who default on payment of rent.
  • Certain mortgage protection policy premiums with

This list is obviously not conclusive.

If you would like one of our Tax experts to prepare your rental income tax return from as little as €195 please contact us now on 01-4800531

Rental Income

The groupon bubble

groupon

I use groupon (City deals in Ireland) a bit. I travel with work and the hotel deals are excellent. Too good in fact when you consider the hotels get on average 50% of what you pay, and only after the guest has stayed. I’m sure the publicity is great for the hotels and if you have a nice stay your likely to go back.

Except in my case and I suspect many others I stay in the hotel and likely wont go back unless theres another silly priced deal.

Reuters say the IPO may value the company at $15 – $20bn , Groupon does not publish financial information but say they have been profitable since 2009. Obviously a $15Bn valuation is significant but whats it based on? Actual profit or crazy future profit expectations.

Consider Gilt groupe (another deals website)which a  group of VCs recently invested $138 million in, giving the company a valuation of $1 billion despite the fact that the site hasn’t made a profit since its launch in 2007

The entire group buying phenomenon is fascinating and looking very like the original dot-com in which scores of start-ups launched themselves into a marketplace only to see the market suddenly retract.

New reduced VAT rate

The Finance (No. 2) Bill 2011 has a provision for a new reduced VAT rate at 9%. This rate mainly applies to good and services related to tourism. This list of goods and services on which the VAT rate will change is listed below.
Supplies of goods and services at the new 9% rate:

  • catering and restaurant supplies, including vending machines and take-away food (excluding alcohol and soft drinks sold as part of the meal)
  • hotel lettings, including guesthouses, caravan parks, camping sites etc
  • cinemas, theatres, certain musical performances, museums, art gallery exhibitions
  • fairgrounds or amusement park services
  • facilities for taking part in sporting activities including green fees charged for golf and subscriptions charged by non-member-owned golf clubs
  • printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)
  • hairdressing services

The VAT rate is effective  for the period 1 July 2011 to 31 December 2013.

VAT and Charitable Donations via SMS Text Message

VAT Rate

Questions have arisen in relation to the VAT treatment of donations to charity, usually for specific disaster appeals, made via mobile phones using SMS shortcodes. The purpose of this eBrief is to clarify the correct VAT treatment that should apply in respect of such donations.

Overview:
The provision of telecommunications services is liable to VAT at the standard rate, currently 21%. Charitable donations are not deemed to be consideration for a supply and are therefore outside the scope of VAT. Generally speaking, the donations in question are made where an individual texts an SMS shortcode specific to a charity, with the intention of donating money to that charity. Following receipt of that text message, a separate message is sent to the individual and the amount that represents the donation is debited to their bill or to their prepaid phone credit, as the case may be.

Donations where the telecommunications provider waives their fee
Where the full amount of the donation is passed over directly to the charity concerned, the entire amount is deemed outside the scope of VAT. The amount involved represents a donation to charity and, because the operators have waived their fee, is not regarded as consideration for the supply of a telecommunications service. It is not a question that any VAT due on a taxable transaction has been waived. It is on the basis that no consideration has been charged for a telecommunications service that no VAT charge arises.

Donations where a fee is charged for the telecommunications service
Where the provider of the telecommunications service charges a fee for facilitating the transaction, then they are obliged to charge VAT at the standard rate on this fee.

However any monies that are directly transferred to the charity, independent of this fee, are considered to be a charitable donation. This donation is also deemed to be outside the scope of VAT.

Example:
Where €1 is attributed to the shortcode but 10c of this is deducted as a fee for the telecommunications provider, then that 10c will be liable to VAT at the standard rate. This 10c is deemed to be consideration for the supply of telecommunications services. The remaining 90c, assuming it is passed in full to the charity, is considered a donation and no VAT will apply to this.

Where the full €1 is directly transferred to the charity, and the service provider makes no deduction, that full amount is a non-taxable donation to that charity.

Where other parties involved in the process charge fees, such as those providing technical support, those fees are also liable to VAT.

Records
The charity involved, the mobile operators, and any other party supplying services to support the process, must be in agreement in respect of the transaction set-up. The mobile operators must be able to clearly identity all appropriate transactions in their records so that the VAT status of amounts treated as contributions to charity can be verified.

Taken from http://www.revenue.ie/en/practitioner/ebrief/2011/no-292011.html