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Irish Employment Tax



It’s very difficult to keep up to date with all the amendments to the Irish tax system so here is a summary of some of the changes to be mindful of in 2018:

1. Annual Membership Fees paid to a professional body (Revenue eBrief 04/18 published on 9th January 2018)

https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0042018.aspx

The updated Revenue guidance notes allow an employee to claim a deduction for professional membership fees only in circumstances where:

  1. There is a statutory requirement for that employee to be a member of a specific professional organisation or body or to hold a practicing certificate in order to carry out the duties of his/her employment or
  2. In the absence of that professional membership or practicing certificate the individual cannot legally fulfill the full duties of his/her employment.

Where the employer pays the membership fee on the employee’s behalf and either of the above two conditions apply then no Benefit-in-Kind is deemed to have arisen.  Subsequently no payroll taxes will arise.

We would advise all employers to ensure the payment of professional membership fees on behalf of employees can be supported in the event of a Revenue Audit.

2. Increase in Employer’s Pay Related Social Insurance from 10.75% to 10.85% from 1st January 2018.

3. Benefit-in-Kind Exemption of Electric Vehicles for 2018. 

Finance Act 2017 introduced this exemption for electric vehicles which were available for private use for employees during the 2018 tax year.  It is not clear whether or not this scheme will be extended into 2019 which may result in a low uptake in purchasing electric vehicles by employers.

The exemption applies to cars and vans deriving their power from an electric motor.

It does not apply to hybrid vehicles.

4. PAYE Modernisation or Real Time Reporting

From 1st January 2019 all employers will be required to accurately provide PAYE data to Revenue on a Real Time basis.

This effectively means:

  • Revenue will be able to automatically review employees’ payroll information and immediately identify any discrepancies and errors.
  • The PAYE information submitted to Revenue must be 100% correct.  In other words, the opportunity to amend errors at the end of the year has been elimited.

For further information, please follow the link:

https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-892017.aspx

We would advise all employers to take the time, sooner rather than later, to ensure their payroll processes will be adequate to handle the increased obligations of the Real Time Reporting.

Here is a list of other relevant Revenue eBriefs:

Home Carer Tax Credit – Revenue eBrief No. 009/18 (29 January 2018) https://www.revenue.ie/en/tax-professionals/ebrief/2018/no-0092018.aspx

Change in Basis of Assessment – Schedule E – Revenue eBrief No. 127/17 (29 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1272017.aspx

Taxation of payments to craft apprentices by Education and Training Boards –Revenue eBrief No. 126/17 (29 December 2017)

Benefit-in-Kind on use of Company Vans – Revenue eBrief No. 124/17 (28th December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1242017.aspx

Exemption from Income Tax in respect of certain payments made under employment law – Revenue eBrief No. 118/17 (20 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1182017.aspx

PAYE Services: Tax and Duty Manual Updates – Revenue eBrief No. 111/17 (01 December 2017) https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-1112017.aspx

Amendments to the Employment and Investment Incentive on 2nd November 2017 – Revenue eBrief No. 99/17 (02 November 2017)
https://www.revenue.ie/en/tax-professionals/ebrief/2017/no-992017.aspx

Have a question? Contact Claire McNamara.

Your comments are always welcome!

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Since founding Accounts Advice Centre in Dublin in 1996, Claire McNamara has established a reputation for successfully advising businesses, corporate and personal tax clients. Her knowledge spans various sectors and her experience includes corporate transactions, inheritance tax planning, International Tax Treaties, personal tax as well as advising on issues affecting non domiciled individuals and offshore clients. She constantly delivers a value added service and efficient tax management solutions to high net worth private clients, property owners, executives, entrepreneurs, entertainers and members of various professions.

As a Chartered Tax Adviser, Claire has considerable experience in professional practice and will personally help you to deal with all your tax affairs competently, professionally and successfully. She has also lectured extensively in taxation on courses for the main professional accountancy qualifications including A.C.C.A., A.C.A. and C.P.A. and is actively involved in preparing students for the Irish Tax Institute’s CTA qualification.

Claire has effectively handled a number of Revenue Audits and Appeals on behalf of her diverse client base and has successfully negotiated solutions resulting in substantial differences to the eventual tax liability, surcharge and penalties.

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