REBUILDING IRELAND HOME LOAN

The Rebuilding Ireland Home Loan is a new initiative from the government to help first-time buys who have been turned down by the banks. It’s available to everyone who earns an income of under €50,000 (whether in employment or self-employed). If you are applying jointly, the income ceiling is increased to €75,000. If you are self-employed, your income will be based on a combination of your drawings and profits.

To apply, you will need to do the following:

  • Download the application form from http://rebuildingirelandhomeloan.ie. The form will be available to download from 24th January 2018 (it says 1st February on the website, but apparently that’s a mistake)
  • Phone your local council to make an appointment
  • They will need 2 years accounts, so presumably 2017 and 2016
  • Once you have completed the application, bring it along to your meeting with your local council and they will go through it to make sure everything is correct. They will discuss your options and a decision will take approximately 6 weeks

To be eligible you must:

  • Be a first time buyer (either in Ireland or abroad)
  • Aged between 18 and 70
  • Have an annual gross income of not more than €50,000 for a single applicant or €75,000 for a joint application
  • Be in continuous employment for a min of 2 years (for the primary applicant) or 1 year (for the secondary applicant
  • If self employed, submit two years certified account
  • You must have been turned down by two banks/building societies
  • Live in the property as your normal residence
  • The property must be no more than 175 square metres (gross internal floor area)
  • Consent to an Irish Credit Bureau check
  • The property cannot exceed the maximum market value applicable

The loans are available for 25 or 30 years, either fixed or variable as follows:

  • 2% fixed for up to 25 years
  • 2.25% fixed for up to 30 years
  • 2.30% variable for up to 30 years (subject to fluctuate)

You must take out mortgage protection insurance from the local authority.

You can borrow up to 90% of the market value of a residential property and the maximum market values are set as follows:
€320,000 for properties purchased in Dublin, Cork, Galway, Kildare, Louth, Meath & Wicklow
€250,000 for properties purchased in the rest of the country

The number to call for more information is 051 349720 which is open from 8am to 5pm Monday to Friday, or call your local authority.

TOP 12 ALLOWABLE EXPENSES FOR SMALL BUSINESSES

  1. CAR & VAN EXPENSES
    Most businesses use a car and/or van. The cost of operating the vehicle is deductible as a business expense. However, the car/van should be in the business owners name, and any personal use will need to be disregarded when preparing the income tax return.
  2. EMPLOYEE SALARIES
    The salary you pay your staff is a cost to the business. The Employers PRSI paid is also a business expense.
  3. RENT ON PREMISES
    The cost of renting space – office, storage, factory, storefront etc. is a deductible expense in your business
  4. HOME OFFICE
    For any businesses that don’t rent space, but run their business from an office at home, a percentage of the light, heat and rent can be used as a business expense. Also, the cost of any repairs or upgrading of the home office is deductible as an expense.
  5. PROFESSIONAL FEES
    If your business needs legal advice at any stage during the year, this is fully deductible as a business expense. The cost of your accountant preparing your year-end accounts, tax returns, etc is also a business expense
  6. CONTRACT LABOUR
    Sometimes it's cheaper to take on sub-contractors for short periods of time, than employ staff. The fees charged by the sub-contractors are a business expense to be used to reduce taxes
  7. UTILITIES
    Bills such as heat, electricity, water are business expenses. Other utility bills include your phone and broadband
  8. REPAIRS
    All repair work needed on your business premises are fully deductible expenses on your business
  9. INSURANCE
    All business insurances are deductible expenses
  10. ADVERTISING
    Any advertising costs, including social media adverts and the cost of using a marketing consultant, are all expenses on your business
  11. LOAN INTEREST
    Any interest paid on loans taken out for business purposes are treated as business expenses
  12. COMMISSIONS & FEES PAID
    Bank fees and commissions paid are all deductible business expenses

There are many possible business expenses and these are just the 12 most common. Before finalising your accounts each year, make sure you have included all the expenses you have had during the year to make sure you are not paying too much tax!

10 TAX SAVING TIPS FOR PEOPLE IN BUSINESS

Everyone expects to pay tax, however, are you sure you are not overpaying your income tax? Below are some of the most common (and easiest) ways to save tax on your business:

  1. Set up a pension fund (if you haven’t already)
    Not only is this good financial planning for your future, but it also gets tax relief on the contributions you have paid over the year.
    As we all know, the tax year runs from January to December, and income tax returns are due to be filed and paid the following October. As an added extra, any contributions you make between January and October can be used to reduce the previous year’s tax if necessary.
  2.  

  3. Keep good records of your expenses
    Good record keeping is important when it comes to your income and expenses. Make sure to ask for receipts for everything and then keep them somewhere safe. This is more important for expenses paid by cash so you don’t “loose” expenses. Remember, business expenses reduce your profits (and therefore your tax bill!)
  4.  

  5. Separate business and personal finances
    Always have separate bank and credit cards for your business and never mix your personal finances with your business. This is really a follow-on from point 2 – having a separate bank account will make it easier to calculate your profits and reduce the chances of expenses being overlooked.
  6.  

  7. Take out Income Protection Insurance
    I tend to go on about this a lot to clients. Having income protection insurance means that if anything happens and you become too ill to work, the insurance pays you a wage until you are able to resume work – a must have for the self-employed. You can also get tax relief on the contributions you make under Revenue’s Health Benefit Scheme.
  8.  

  9. Employ family members
    Employing a family member can be tax effective as the cost of their wage can be used to reduce profits for tax. So if you have a teenager who can do some office work or online marketing etc. (let’s face it, they are probably more technically savvy than us!). Once the child performs genuine tasks in the business, then that salary paid to them is tax deductible in your business.  No PRSI is charged if the child is under 16, or if over 16, carries out the work at home where the business is carried on. The child’s salary will be liable for USC charge but at the lower rates. You must, however, register with revenue as an employer
  10.  

  11. Allowance for home office
    If you have your office at home, then you can claim a percentage for rent, light and heat, and broadband. The percentage will depend on the size of the house and how much is used for the business. Nice way to get tax relief on expenses you have to pay anyway to run your home.
  12.  

  13. Using a car for your business
    If you use your car in your business, then you can put all the motor expenses through the business. However, if you use this car for any personal use you will need to write back a percentage to account for the personal element. Make sure the car is in your name or revenue will try to disallow the expenses
  14.  

  15. Medical Expenses
    Keep all medical receipts – doctor, dentist, hospital, consultant and prescriptions. These can be used to give you 20% off your tax bill! If you haven’t been diligent at keeping these receipts, pharmacies and doctors will usually give you a printout for the year so you can make sure you are claiming everything. If you have a family, you can include medical expenses paid for children under 16.
  16.  

  17. Tuition fees
    If you or any members of your family have done any 3 rd level courses, keep a record of the fees paid – these can be used as a credit to reduce tax. The credit isn’t great, but every little helps
  18.  

  19. Be jointly taxed with your spouse
    Being jointly taxed means that any unused tax credits can be passed from your spouse to you to reduce your joint income tax. Also on this, if your spouse has PAYE income, make sure they are claiming any relevant Flat Rate Expenses (see revenue.ie for a full list of these).
  20.  

Finally, if you are unsure if you are claiming all relevant credits and allowances, or are worried that you might not be including the correct expenses in your business, then give us a shout to see if we can help. (AND, accountant’s fees are also a business expense and therefore used to reduce your tax bill)

Revenue Code of Practice

Revenue are changing their code of practice in relation to the correction of errors on submitted tax returns. From 1st May 2017 onward, any errors (or omissions) made in income tax returns that relate to offshore matters cannot be declared or amended without Revenue involvement. 

Offshore matters are things like:

As most people are probably aware, revenue receive financial information on Irish taxpayers from Irish banks and financial institutions.

Revenue have now entered into an agreement with 100 countries to automatically exchange bank and other financial information about Irish residents who hold financial or other assets in these countries. 

From 1st May 2017 this will come into effect and from that date onward taxpayers will no longer be able to make a qualifying disclosure which relates “directly or indirectly to an offshore matter in respect of which Irish tax is payable”. The effect of this will be that taxpayers who do not have their tax affairs up to date in relation to offshore matters will face interest and penalties on any tax liabilities and (most likely) a Revenue Audit.

So anyone with any offshore matters listed above should make sure they have the tax affairs relating to these up to date before the 1st May deadline.

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