The Finance Act 2013 includes provisions for the Diesel Rebate Scheme where repayment of a portion of the Mineral Oil Tax on auto diesel used in certain qualifying motor vehicles will be repaid to qualifying road transport operators.

The scheme will apply to purchases on or after 1^st July 2013. The maximum amount repayable will be 7.5 cent per litre. The revenue is currently updating ROS to allow for the registration and filing of these returns and hope to have ROS compatible by the end of the year.  For more information see www.revenue.ie.

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Under the scheme an employer may provide an employee with a bicycle and safety equipment without an employee being liable for benefit in kind subject to a limit of €1,000. The scheme may be implemented under a salary sacrifice arrangement through the employee’s payroll. The full cost must be recovered within a period of twelve months or less. The employee can avail of this scheme once every five years.

The bicycle and safety equipment are exempt from tax therefore the employee or director will not be liable to income tax (at the marginal rate) employee’s PRSI or USC on the cost of the benefit.

You must use the bicycle and safety equipment mainly for qualifying journeys. This means the whole or part of a journey between your home and workplace.

The employer must purchase the bicycle and safety equipment. Please note that employers will not be able to reclaim VAT paid on the bicycle and or safety equipment.

Employers are not obliged to participate in the scheme however employers choosing to participate must make it generally available to all employers and or directors.

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When filing the return the Revenue gives property owners the option to pay their LPT for 2013 in one single payment or to phase their payments over the period from July to December 2013. One of the phased payment options being made available is the deduction at source from salary or occupational pension.

Therefore employers will be required to make this facility available to their employees from July 2013 onwards. Revenue will notify the employer, via the employers’ copy of the ‘Tax Credit Certificate’ (P2C), to deduct LPT from the employee’s net salary as appropriate.  The employer must commence deductions from July 2013 and spread the deductions evenly over the pay periods occurring between July and December 2013.

The employer will be required to account for and remit the deducted LPT to Revenue on Form P30 and the deductions will also be shown on the employees P60 and P45 where appropriate.

Further information is available on the Revenue website regarding how the deductions at source will operate or you can contact the Employers helpline on 1890 25 45 65.

With the continued changes to payroll calculations and employer obligations it might now be time to look towards outsourced payroll solutions, so that you can focus more on your area of expertise, while ensuring that your payroll will be processed in a compliant and tax efficient manner.

If you need to discuss the above please call us on 021 – 4310266 or email us at pm@parfreymurphy.ie.

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In fact, we had one lucky client who will save €3,225 over the next 18 months. Read on…..

The Employer Job (PRSI) Incentive Scheme exempts employers from liability to pay their share of PRSI for certain employees. The scheme is open to employers who create new and additional jobs.To qualify for the Scheme both the job you create and the person you employ must meet certain criteria.

If you qualify for the scheme you will be exempt from employer’s PRSI for a maximum of 18 months from the date you were approved for the scheme. The purpose of the scheme is to support job creation and counter the drift of people into long-term unemployment and welfare dependency.

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An individual’s principal private residence, together with land occupied as its gardens or grounds up to a maximum of one acre, is exempt from CGT if the individual has used it as his / her principal private residence throughout his / her period of ownership.

In addition to the above relief, further relief may be available in respect of a gain arising to him / her on the disposal of a house which was used by a dependent relative as that relative’s sole residence. The house must have been provided to the dependent relative free of rent or any other consideration i.e. it must have been provided gratuitously.

Dependent relative in relation to an individual means:

–          A relative of the individual (or of the wife or husband of the individual) who is incapacitated by old age or infirmity from maintaining himself or herself, or

–          The widowed mother, or

–          The widowed father whether or not so incapacitated, of the individual or of the wife or husband of the individual.

Dependent relative relief is given by treating the property as if it were the principal private residence of the taxpayer during the period for which it was occupied by the dependent relative. This does not in any way restrict the taxpayer’s ability to claim principal private residence relief on the disposal of his / her own residence.

Income Tax

A dependent relative tax credit can be claimed by an individual if he / she maintains at his / her own expense:

(a)    A relative of his / her or of his / her spouse who is incapacitated by old age or infirmity from maintaining himself / herself, or

(b)   His / her or spouse’s widowed parent, or

(c)    His / her son or daughter who is resident with him / her and upon whom he / she is dependent by reason of old age or infirmity.

If the income of the dependent relative exceeds a specified limit no tax credit is due. For the tax year 2012 the specified limit is €13,837.

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The following are examples of some benefits which are not liable for tax:

• Jobseeker’s allowance
• Maternity benefit (however will be taxable from July 2013).
• Adoptive benefit
• Child benefit
• Bereavement grant
• Disability allowance
• Family income supplement

The most common taxable benefits arising in practice are job seekers benefit, illness benefit, carer’s benefit, State pension and one parent family payment.

Any individual in receipt of benefits from the Department of Social Protection is obliged to declare same to the Revenue Commissioners. As no tax is deducted at source from the payment of the benefit, this can lead to substantial tax underpayments for people in receipt of taxable benefits.

If an individual has other income e.g. private pension which uses up all of their tax credits then any taxable benefit they receive is liable for tax in full. Many taxpayers are not aware of this and if it is left uncorrected for a number of years a very substantial tax liability may arise in addition to interest and penalties.

The Revenue Commissioners are currently comparing data received from the Department of Social Protection with income tax returns filed in the tax year 2010 and prior tax years to ensure that individuals included in their returns any taxable benefits which they received

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Generally VAT has not been considered by either parties for changes made in either the management of the scheme or the owners use of the investment.

The key concerns revolve around VAT compliance concerns, VAT liability issues and opt out/termination matters.

We can help owners/investors to avoid potential VAT liabilities on their investments and work with management companies in addressing VAT compliance issues in order to provide a VAT neutral position.

If you are associated with Holiday Cottage schemes then we would be pleased to address the above issues for you.

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Negative USC can occur when employees receive USC refunds.

Therefore a P35 with a negative USC amount must be filed between Jan 28 and Feb15 2013 which is the final deadline date.

It appears that you cannot print a p45 if you are unfortunate enough to have an apostrophe in your surname!

You have been warned!

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VAT cannot be reclaimed by the company on the cost of the bikes or associated equipment i.e. helmets, pumps, etc.

More information on the scheme can be found at www.biketowork.ie.

Any queries? Please leave a comment or contact me on blog@parfreymurphy.ie.

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