There are various allowances and reliefs available which can help minimise tax liabilities arising on earnings, profits of trade or gains when you sell chargeable assets, but understanding what they are and which ones you are entitled to can be a daunting.
Although the Revenue has helplines available to assist taxpayers, staff members are not tasked with providing advice on how to organise your affairs to minimise the amount of tax you pay. If you are looking to make tax savings but do not want to attempt to interpret detailed tax legislation, you should seek advice from us. We offer all clients tax planning reviews and try to ensure that our clients only pay as much tax as they are legally obliged to and no more!
We have included some tax tips below which provide general guidance on various tax saving strategies and should answer some of your tax questions.
Employing your spouse in the business
If you are self-employed and your spouse helps out with general administration, or any other role, it is quite legitimate to pay your spouse a salary. However, there are a few rules that need to be followed, such as how much to pay your spouse and have evidence that the payments were made during the year. Sole traders with higher rate tax liabilities will benefit significantly from this arrangement and further tax savings could be made by setting up an employer pension scheme.
Selling additional homes
Are you selling that second or third home and want to reduce any capital gains tax that you may need to pay? The garden shed and other fixtures and fittings are treated as wasting chattels for Capital Gains Tax, i.e. when you sell them there is no tax to pay. Why not ask your solicitor to allocate part of the selling price in the contract to these items? Make sure you seek advice regarding Stamp Duty Land Tax when considering these issues.
Capital Gains – Using home as office
If you claim tax relief for the use of a room as an office there can be a tax charge when you later sell your home, however, we can advise you of measures that can be taken to help to minimise or mitigate a capital gains tax liability.
Recover VAT on invoices that you have paid or received before you registered for VAT by including the input VAT on your first return. Make sure you have the VAT invoices and keep a schedule of the adjustments you have made. Be careful though, there are time limits and rules for this recovery measure so be sure to speak with your accountant!
Every limited company that is based in Ireland is subject to corporation tax on their profits. The first thing you must do is register your company with the Revenue Commissioners using their official forms, letting them know that you are liable for corporation tax.
If your company is liable for corporation tax, you must calculate how much profit your company makes for each accounting period and how much corporation tax is payable on those profits. This information must be reported to the Revenue Commissioners on a corporation tax return form and accounts and tax computations must be submitted also in support of the return. There are strict penalties for filing late returns and interest is charged on tax paid late, so it is important that the deadlines, which are determined by your company’s annual accounting date, are adhered to.
We can assist you with the preparation of company accounts, company tax returns and tax computations and will also be able to provide advice on any tax planning areas that may benefit you and your company.