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ACCESS TO ADDITIONAL VOLUNTARY CONTRIBUTIONS
Individuals will be allowed a once-off option to withdraw up to 30% of the value of Additional Voluntary Contributions. Withdrawals will be liable to tax at the individual’s marginal rate of tax. Option will be available for 3 years from the passing of Finance Bill 2013.

PENSION LEVY
Pension Levy of 0.6% will not extend beyond the original proposed end date of 2014.

INCOME TAX

MATERNITY BENEFIT
This will be taxable with effect from 1 July 2013

TOP SLICING RELIEF
Will no longer be available from 1 January 2013 on ex-gratia lump sums where the non-statutory payment is €200,000 or over.

UNIVERSAL SOCIAL CHARGE
The standard rates of USC will apply to people aged 70 years of age and over and medical card holders (PAYE/self-employed income earners) earning €60,000 and above with effect from 1 January 2013.

PRSI
The weekly PRSI allowance is being removed. Increase in the minimum annual PRSI contribution for selfemployed earners from €253 to €500.

FOREIGN EARNINGS DEDUCTION
The Foreign Earnings Deduction is being extended for employment related travel to certain African countries.

CHARITABLE DONATIONS
A blended rate of relief of 31% on charitable donations is being introduced.

BIK ON PREFERENTIAL LOANS
The interest rate used in calculating the taxable benefit is being increased from 12.5% to 13.5% other than for home loans. The specified rate used to calculate the taxable benefit from home loans is decreased from 5.0% to 4.0%

EMPLOYMENT & INVESTMENT INCENTIVE (EII)
The EII scheme is being extended from 2014 to 2020.

RELIEFS AND EXEMPTIONS

FILM RELIEF
The Film Tax Relief Scheme is being extended to 2020.

AVIATION SECTOR
An accelerated capital allowance scheme, over seven years, in relation to construction of certain aviation-specific facilities is to be introduced.

LOCAL PROPERTY TAX
Local Property Tax (LPT) will be charged at 0.18% of market value up to €1 million.

A rate of 0.25% will apply to any excess value over €1 million. Collection of the Local Property Tax (LPT) will commence on 1 July 2013 and will be administered by the Revenue Commissioners.

A half-year of LPT will be payable in 2013, full year payable in subsequent years.

The Household Charge will cease with effect from 1 January 2013.

The Non-Principal Private Residence (NPPR) Charge will cease with effect from 1 January 2014.

CAPITAL TAXES

CAPITAL GAINS TAX
Increased to 33% and applies to disposals made after 5 December 2012.

CAPITAL ACQUISITIONS TAX
Increased to 33% and applies in respect of gifts or inheritances received after 5 December 2012.

The current group tax free thresholds are being reduced by 10%. This reduction applies in respect of gifts or inheritances taken after 5 December 2012.

EXCISE DUTIES

VEHICLE REGISTRATION TAX (VRT)
Rates of VRT are being increased with effect from 1 January 2013.

MOTOR TAX
Motor Tax rates across all categories will increase with effect from 1 January 2013.

ALCOHOL PRODUCTS
The excise duty on a pint of beer or cider, and a standard measure of spirits is being increased by 10c (including VAT). Duty on a 75cl bottle of wine is being increased by €1 (including VAT), with pro-rata increases on other products.

TOBACCO PRODUCTS
The excise duty on a packet of 20 cigarettes is being increased by 10 cents (including VAT) with a pro-rata increase on the other tobacco products, with effect from midnight on 5 December 2012.

The excise duty on roll-your-own tobacco is also being increased by 50c per 25g pouch

These increases will take effect from midnight on 5 December 2012.

CORPORATION TAX

3 YEAR RELIEF FOR START UP COMPANIES

This relief is being extended to allow any unused relief arising in the first 3 years of trading due to insufficiency of profits to be carried forward for use in subsequent years. This is subject to the maximum amount of relief in any one year not exceeding the eligible amount of Employers’ PRSI in that year.

R&D TAX CREDIT

The R&D Tax Credit regime provides for a 25% tax credit for incremental expenditure on certain research and development (R&D).

Finance Act 2012 provided that the first €100,000 of qualifying R&D expenditure would benefit from the tax credit without reference to the original 2003 threshold. The amount of
expenditure is being increased to €200,000.

CLOSE COMPANY SURCHARGE
The de minimis amount of undistributed investment and rental income which may be retained by a close company without giving rise to a surcharge on such income is being increased from €635 to €2,000.

REAL ESTATE INVESTMENT TRUSTS (REITs)
The internationally recognised model for property investment – Real Estate Investment Trusts (REITs) – is to be introduced.

VAT

INCREASE IN CASH RECEIPTS VAT ACCOUNTING
The annual VAT cash receipts basis threshold is being increased from €1 million to €1.25 million with effect from 1 May 2013.

TAX ON SAVINGS

DEPOSIT INTEREST RETENTION TAX & EXIT TAX ON LIFE
ASSURANCE POLICIES AND INVESTMENT FUNDS

DIRT together with the rates of exit tax that apply to life assurance policies and investment funds is being increased to 33% for payments made annually or more frequently and to 36% for payments made less frequently than annually.

The increased rates will apply to payments, including deemed payments, made on or after 1 January 2013.

For further details on the budget or any queries, please contact us at 091-871613 or 087-1202405.

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The Government has today launched an ambitious jobs plan which aims to create 100,000 new positions by 2016 and a further 100,000 by 2020.

In an effort to address the difficulties small companies face accessing credit, the State is to guarantee 75% of some loans to small and medium businesses. That measure is expected to be operational by the second quarter of this year.

But some business groups have criticised delays in introducing the scheme.

The plan also includes a development capital scheme for companies with prospects of jobs and export growth. It will be backed by €50m of state investment which is expected to leverage up to €100m.

The jobs plan also sees the establishment of a new micro finance fund which will supply investment in small companies seeking less than €25,000. The fund will be worth €10m every year for ten years. The European Investment Bank will supply some of the equity. Today’s plan launches a finders’ fee for people of Irish extraction abroad who succeed in bring major job projects to Ireland. There is also a facility for the diaspora to contribute to investment in new enterprises which is modelled on similar scheme in Israel.

The plan includes steps to encourage more mobile international entrepreneurs to start businesses in Ireland through a €10m State fund for investment in start-ups, improvement in immigration arrangements, a targeted marketing campaign and greater use of IDA Ireland’s network.

A strategic investment fund will match private sector investment with money from the National Pension Reserve Fund. The NPRF will commit €250m and a further €1 billion will be sought from institutional investors in Ireland and overseas for infrastructural investment.

Under the plan, county and city enterprise boards will be dissolved. A new micro enterprise and small business unit in Enterprise Ireland will now work with local authorities. A corporation tax exemption will be extended for start-up companies until 2014.

Other measures will see better support indigenous companies to improve their performance, including increased mentoring of SMEs by top business leaders, multinationals and large Irish companies and helping small businesses to engage in R&D and innovation.

Under the plan, more SMEs will be helped to win big contracts, both from Government and from large multinationals while it also introduces measures to reduce costs, including a request to government department and agencies to identify, by next month, charges levied on business that can be frozen or reduced for 24 months.

Launching the plan, which contains over 270 actions to be implemented in 2012 by all 15 Government Departments as well as 36 State agencies, the Government said it will improve supports for job-creating businesses and remove barriers to employment-creation across the economy.

Taoiseach Enda Kenny rejected a suggestion that this was the fourth time the Irish people had heard such promises. He said that the jobs budget announced last year was different. But he added: “There are some things in here that have been lying around for a very long time. If they are good but they were not implemented, there is no reason they should not be implemented here.”

He said the Government would target specific sectors with new policy supports and improve the way Government interacts with businesses by cutting costs and red tape. He said he expected to have two million people in employment by 2020.

The Minister for Jobs, Enterprise and Innovation, Richard Bruton said there was no ‘big bang’ solution to the jobs crisis. He also said the pension levy was not funding any of the initiatives in this plan. “What we are spending here are a lot of the enterprise budgets… we are using it in a smart way” he added.

Tánaiste Eamon Gilmore said Ireland was not going to change its rate of 12.5% corporation tax and he believed that had been accepted, in the main, in Europe.

To find out more about the taxation and accountancy incentives that might be available contact us today.

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They all add up!

http://www.jobbridge.ie

The attached link is the government incentive which you may have heard about it in the media, it basically involves a company taking on an unemployed person (for no pay) and giving them experience for a period of between 6-9 months. The benefit to the employee is they get an extra €50 per week on top of their social welfare.
The incentive is designed to:

• Keep unemployed people close to the labour market.
• Provide unemployed people with the opportunity to gain quality work experience thereby increasing their employability.
• Facilitate employers to contribute to the national activation agenda by providing internships opportunities to the unemployed.

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1. If you haven’t already done so review all costs and overheads and identify where cut backs can be made.

2.  Prepare a forecast of all fixed and variable cash inflows & outflows. This summary should be monitored and updated regularly.

3. Taxes General:

• File all tax returns online to avail of extra time to file and pay your liability, as well as improving administration efficiency
• File early to get refunds
• File on time to avoid unnecessary interest & penalties
• If you pay by direct debit review regularly to ensure you are not under or over paying. Correct any underpayments before year end to avoid penalties.
• Ensure you are claiming all tax credits
• See SEI List for Energy Efficient Products, which qualify for accelerated capital allowances

4. VAT

• If you are setting up a new business, register for VAT early. You can register before you start to generate sales. If you are not registered you cannot claim VAT on pre trade costs.
• Pay attention to invoice dates. If you invoice a customer at the end of your VAT period, your VAT liability is due the following month although you may not have been paid. If you can invoice the customer at the beginning of the month/ VAT period instead you will have more time before the VAT becomes payable.
• Cash receipts basis- if your business qualifies, this basis will aid cash flow as you will not have to pay VAT on sales until you are paid but can claim VAT in purchases as incurred. 
• In some cases it is possible to file your VAT return quarterly, bi annually or even annually. Filing on a less frequent basis will save administration time and may aid cash flow. If you are generally in a refund position you should file on a more frequent basis.

 5. Employment & Taxes:

• Businesses face a long wait for refund of redundancy rebates. Seek to have outstanding rebates offset against current tax liabilities.
• Revenue Job Assist Scheme- Double deduction for wages and employers PRSI for individuals unemployed for more than 12 months
• Employer PRSI Incentive Scheme- 12 month exemption on employing certain unemployed individuals
• FÁS Apprentice Scheme
• Lower BIK charge on energy efficient cars
• If you have made redundancies/ pay cuts reduce payroll tax direct debits accordingly

 6. Corporation Tax:

• If you company has losses these can be carried back to prior years- 2 year deadline
• If profits are falling base preliminary tax on 90% of current year rather than 100% of prior year.   

 7. Stock:

• Holding excessive levels of stock is effectively tying up cash. Apart from the cost of the stock, other costs include management, storage, insurance and obsolescence. Determine the minimum level of stock necessary to run your business.
• Calculate stock turnover regularly. Stock Turnover= Turnover/ Stock. Low stock turnover means stocks are too high.
• Negotiate with suppliers. Many suppliers have now abolished minimum order quantities. Try to buy on a sale or return basis and for suppliers to pay for delivery costs.
• Compare inventory holding cost with the cost of not holding it i.e. missed sales, bulk discount, delivery costs etc.

 8. Debtors:

• Develop rigorous credit control procedures
• For new customers seek references, cash upfront for initial purchases, credit rating, do company search on CRO.
• Set credit limits for all customers
• Regular review of all debtors
• As soon as a debtor looks like they are in difficulty enter negotiations to set up a payment plan and stop supply if necessary.
• Take payment by EFT/ Credit card rather than a credit account
• Make sales subject to retention of title
• If necessary take legal action

 9. Banking:

• If you are not already doing all of your banking transactions online, address this today. The cost of writing a single cheque is €1.65 whereas an online transaction costs €0.12.      
• Ensure you are getting the best rate on any cash reserves.
• If you are setting up a new business look for the free banking period usually offered to new businesses.
• Using a business credit card to pay for transactions will extend the credit period.

 10. Lease rather than buy assets:

• You will have the benefit of paying for the asset over a period of time rather than a large initial outlay.
• Also you can write the cost off against your taxes over a shorter period- 3 years rather than 8.

 11. Energy Costs:

• Ensure all light bulbs in your business are energy efficient.
• Put lights in common areas on sensor.
• Take the necessary steps to ensure your building is well insulated and install heating controls.
• Shop around and compare provider costs paying particular attention to standing charges.

 12. Rent: Negotiate with your landlord or if as a result of downsizing you have spare office space seek a tenant.

 13. Stationary: Stationary costs can be quite significant. Stock should be well controlled to avoid pilferage and staff should be encouraged to print only when necessary.

 14. Insurance: Shop around when the time comes for renewing business, office and vehicle insurances.

 15. IT & Telecommunications:

• Consider implementing a new software system to improve efficiency and financial reporting
• Shop around to ensure you are getting the best telephone & internet deals to meet your business needs. Consider bundling mobile, landline and broadband into one package
• Communicate to staff that work mobile and landlines are not for personal use and that personal use will be recharged.
• To improve staff efficiency, control internet usage so that certain websites are completely blocked or only available at lunchtime.

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Keeping books and records.

The following records must be maintained and kept up-to-date.

• Sales Book – This records all the sales of the business. The sales may be for cash or on credit but a full record must be maintained. Sales must also be analysed under the various VAT categories.
• Purchases Book – This records all the purchase invoices of the business. The invoices should be analysed under the various expense headings and also record the relevant VAT categories.
• Cash Book – This records all the cash received by the business. In some businesses the Cash Book and the Sales Book can be the same. This will usually only occur where sales are on a cash basis only.
• Payments Book – This records all the bank payments of the business. Payments should be recorded regardless of how they are made from the bank account, e.g. by cheque, direct debit or standing order. The payments should also be analysed under the relevant expense headings e.g maintentance, repairs etc.
• Creditors Ledger – If purchases are made on a credit basis the business should maintain a creditors ledger which keeps an account of amounts due to each of it’s suppliers.
• Debtors Ledger – If sales are made on a credit basis to customers it is important to keep an accurate and up-to-date account of the amounts owing by each individual debtor.

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