Tag Archive: Income Tax


Now is the time you should be receiving a P60 from your employer or pension provider. They are required by Revenue to issue them between 1st January and the 15th February showing your income for 2015.

What information do they show?
A P60 shows your name and Personal Public Service number (PPS), as well as your tax credits. Then the gross amount earned for the year together with the tax deducted by your employer and remitted to Revenue.
Your P60 will also show the amount of income for Universal Social Charge (USC) purposes, which is not always the same as the taxable gross income. For instance, if you received some Benefit in Kind it will be added into your USC gross income. The amount of USC deducted by your employer will also be shown.
Then there is the amount of Pay Related Social Insurance (PRSI) deducted as well. This is what your Contributory State Pension (formerly the Old Age Pension) will be based on in due course. It is important that these are recorded correctly by the Department of Social Protection. If you are in any doubt about the number of contributions that you have paid, or what type of deductions have been made by you, you can request a copy of the record of your contributions held by the Department of Social Protection, by phoning the PRSI Records Customer Service Team at 1890 690 690.
What do you do with your P60?
This is the information you need to put into your Return of Income Tax for 2015. If you do not send in a return then there is no way for you to know if the correct amounts have been deducted from your salary. I am aware of one company with 3,500 employees, who did not update their employee tax credits when they received a batch of amendments from Revenue. The result was an incorrect amount of tax was deducted and had to be sorted out at the end of the year.
Do you need to send in a tax return?
If you have untaxed income of more than €3,147 then you are required to submit a tax return. If Revenue have written to you to say that you are required to submit a tax return then you should do so. You could also be due a refund e.g. for incorrect tax credits or correct tax credits applied incorrectly, or you may be due a credit against your tax e.g. for medical expenses, so it is a good idea to send in a tax return.
If you send your tax return in now, you will get your refund back immediately. If you owe tax, then you still have until 31st October 2016 to pay it and it is a good idea to know how much it is so you can budget for it.
If you have any problems with any of the above, or if you do not understand it, then you should contact Cliff Kirker.

Deadline• Due date for self-assessed Income Tax and Capital Gains Tax returns for the year of assessment 2014.
• Due date for the payment of any balance of Income Tax for the tax year 2014, if inadequate preliminary tax was paid for 2014.
• Due date for the payment of Preliminary Income Tax (inclusive of USC) for the tax year 2015.
• Due date for the payment of Capital Acquisitions Tax and filing returns in respect of gifts and inheritances taken in the 12 month period ended on 31st August 2015.
• Due date for the payment and return of €200,000 Domicile Levy for 2014.
• Latest date for making contributions to a PRSA, an AVC or an RAC for the tax year 2014.

Some of the above dates are extended to 12th November 2015 if using ROS.

Other relevant dates:

1st November 2015:
Date on which residential property must be held in order to be liable for the 2016 Local Property Tax.

31st December 2015:
General deadline for qualifying work under the Home Renovation Incentive.
Claims for repayments of Income Tax for the year of assessment 2011 must be submitted by this date.

As usual if you have any questions about your tax then contact us.

For most of us, this comes into play if you rent a room to students or an employed person. Revenue have a clear policy on this.

For Rent
If you let a room (or rooms) in your sole or main residence as residential accommodation, including for example, rooms let to students for the academic year, and the gross amounts receivable, including monies for food, laundry or similar goods and services, does not exceed the exemption limit for the year of assessment in question, the profits or losses on the relevant sums are treated as nil for Income Tax purposes.

The exemption limit for 2014 was €10,000 and for 2015 is €12,000.

Bed and Breakfast
Revenue make it clear that this allowance does not apply to Bed and Breakfast use (including Airbnb). They state: “The room or rooms must be used for the purposes of residential accommodation, i.e. the occupant is using the room, either on its own or in conjunction with other parts of the residence, as a home. The relief does not apply to rooms that are used for the provision of accommodation to occasional visitors for short periods, including, for example, where the accommodation is provided through online accommodation booking sites.”

Income Tax return
Even though the income is exempt if it is under the exemption limit, it still needs to be included in your Tax return under the Exempt Income section.

Please see the separate blog below about this.

If you have any questions about any of the above or if you want help to get your tax affairs sorted out, then please Contact us.

The deadline for sorting out your rental income through Airbnb is looming. Any income earned in 2014 needs to be entered on your 2014 Income Tax return which is due to be filed by 31st October 2015.

If you are not in the habit of filing Income Tax returns then you need to start now. Don’t leave it until the end of October as you will need to register for filing online and this takes up to two weeks. You will have a penalty to pay if your return is late.

If you have already filed then you need to send in your rental details and ask for an Amended Assessment.photo

2013 Income
If you had income in 2013 which you have not declared, then you need to declare it now, before Revenue come to you. Otherwise the penalties and interest you have to pay will be a lot steeper.

2015 Income
You need to be setting aside up to 58% to pay your Income Tax when it becomes due.

You cannot afford to ignore this. As you know, Airbnb are supplying names and addresses to Revenue of all those who rent out a room / house through them so Revenue will most certainly be aware of the income. If you do not go to Revenue first, they will come to you, and the result will not be pleasant!

Capital Gains Tax
Be aware that if you are renting part of your Principal Private Residence then you may have a Capital Gains Tax liability if you sell your premises. Normally, there is no liability on your Principal Private Residence but there may be on the part used for a business (in this case renting).

Rent A Room Allowance
Please see the separate blog below about this. It is a connected area and can cause confusion.

If you have any questions about any of the above or if you want help to get your tax affairs sorted out, then please Contact us.

Can you get tax relief for medical expenses? The answer is yes – and no. You can get tax relief for certain expenses but there are qualifications. Let us be more specific. Firstly to get income tax relief you must be liable to pay income tax. If you are someone with a low income who is not paying any income tax, then you will not get any tax relief for medical expenses.

Next, the medical expenses must generally have been prescribed by a medical practitioner. If you decide to go to a chiropractor for instance, then unless this has been prescribed by a practitioner, it will not be eligible for tax relief.

The normal type of expenses which are eligible are:drugs

• GP fees
• consultants fees
• outpatient fees
• hospital bills
• drugs or medicines prescribed by a doctor, dentist, or consultant
• maintenance or treatment in a hospital in connection with the services of a practitioner
• diagnostic procedures carried out on the advice of a practitioner
• physiotherapy or similar treatment prescribed by a practitioner
• supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner e.g. a hearing aid
• nursing home expenditure

As well as these you can get relief for the cost of gluten-free foods manufactured specifically for coeliacs or “diabetic” products for diabetics. There are other reliefs for certain types of illness or disability too e.g. kidney patients.

You cannot claim relief if the expenses are reimbursed to you e.g. by VHI, but you can claim relief on any unreimbursed amount. Is it better to get expenses reimbursed by VHI or claim them against your tax? The answer is it is better to get reimbursement as you will get 100% of the cost back whereas tax relief will only give you 20% back.

You will only get tax relief on prescription drugs and only up to a limit of €144 per month, i.e. €1,728 for 2014. This will give you relief at 20% which is €345.60.

Dental expenses
You cannot claim for routine dental procedures like a filling or dental hygiene. Your dentist has a MED 2 form which needs to be completed if you want to claim for a dental procedure. Eligible dental procedures are normally ones which cost a lot of money like crowns, root canal treatment and orthodontic treatment.

Rate of relief
Relief on eligible expenditure is given at 20% and is normally shown in the tax credit section of your Notice of Assessment.

Nursing Home Expenditure
Expenditure for accommodation is allowed but not expenditure for a hair-do or other incidentals. 100% of this eligible expenditure is allowed at your marginal rate.

When to claim
A claim can be made at the same time as you are completing your annual income tax return. Otherwise you may claim retrospectively for the past four years only.

What about non-Irish expenses?
Basically, medical expenses incurred abroad will be eligible if they are similar to those that would have been eligible if incurred in Ireland.

The above is a whistle-stop tour of tax relief for medical expenses. As usual, if you have any questions about this area, then please Contact us.