Noone Casey has extensive experience within the media and entertainment industry. We understand the lives of artists and performers, and how the nature of their work leaves little time to look after finances. We believe we have a structured approach to ensure that your financial affairs and taxes are in order. Whether you are looking for international tax advice to reduce overseas withholding taxes or are starting a new band, we can sort you out.
With a diverse portfolio of international clients, including Rodrigo y Gabriela, Tommy Tiernan and many others, we not only appreciate the issues you face, but we enjoy helping you park your financial concerns so that you can enjoy your success.
Have you been refused credit by the banks for loans of up to €250,000?
The Minister for Jobs, Enterprise and Innovation this week announced that the Microfinance Scheme will be open for business from Monday 1st October.
Applications for businesses and sole traders across all sectors employing up to ten people who have been refused credit by the banks for loans of up to €250,000 will be accepted and processed. Criteria, guides and application forms can be found at County and City Enterprise Boards and at www.enterpriseboards.ie
Contact us at Noone Casey for advice on the Microfinance Scheme and how it can benefit you.
The report of the Comptroller and Auditor General for 2011 has been published. In relation to tax and Revenue it includes a number of interesting points:
• Income tax receipts increased by a net €2.5 billion (bn) in 2011 when compared with 2010, reflecting the introduction of the Universal Social Charge (USC) and the reduction in tax bands and credits.
• Tax forecasting has been made more difficult with the emergence of significant corporation tax losses. The utilisation of losses in 2010 is estimated to have reduced potential corporation tax receipts by €2.75bn.
• A new debt analysis tool was introduced on a pilot basis in February to allow Revenue case workers prioritise the recovery of debt by reference to the age of the debt. It also allows them to determine the type and timing of interventions to maximise recovery.
• Total tax outstanding at the end of March 2012 was just under €2bn. The two largest categories of debt outstanding are income tax and VAT. Overall, about one third of the debt outstanding was under appeal.
• 3 economic sectors accounted for 59% of the total tax written off in 2011; construction, wholesale and retail trade and accommodation and food services. The majority of these write offs arose due to liquidations and the trade ceasing with insufficient liquid assets
Thanks to the Institute of Tax for the above summary.
Since the enactment of the Civil Law (Miscellaneous Provisions) Act 2008 any Commercial Tenant is entitled to opt out of his Statutory entitlement to a further Lease of between five and twenty years which automatically arises after leasing a Commercial Premises for five years or more.
While Agency workers do not have the same employment rights as regular workers, under the EU Directive on Temporary Agency Work, Temporary Agency Workers have the right to equal treatment regarding basic employment conditions. The EU Directive on Temporary Agency Work came into effect on the 5 December 2011. The Directive is transposed into Irish Law by the Protection of Employees (Temporary Agency Work) Act 2012. It provides that all Temporary Agency Workers must have equal treatment with regular workers in respect of hours of work and rest periods; pay and work done by pregnant woman, children and young people. The Act came into effect on the 16 May 2012. Temporary Agency Workers covered by the Act have the right to the same employment conditions as if they had been directly employed by the hirer under a Contract of Employment. The right to equal pay has retrospective effect to the 5 December 2011. The Act applies to Agency Workers employed by an Employment Agency who are assigned to work for a temporary period to another Organisation. The Act may exclude employees under a Managed Service Contract which is a Contract for Services, for example, cleaning, where the Contractor is responsible for managing and delivering the service. The Act does not apply to work done in the course of a Work Placement Scheme or any publicly funded Vocational Training or a Re-training Scheme. Pay is defined as including only basic pay, shift premium, piece rates, over-time premium, unsocial hours premium and Sunday premium. Pay does not include Occupational Pension Schemes, Financial Participation Schemes, Sick Pay Schemes, Benefits-in-Kind or Bonus Payments.
The Minister for Jobs, Enterprise and Innovation recently published the Credit Guarantee Bill 2012. The scheme will provide a 75% state guarantee to banks against losses on qualifying loans to firms with growth and job creation potential.Initially, the scheme will facilitate up to €150 million of additional lending a year to SMEs. The cost of the scheme per € 150m of lending is € 6.38m. However, this does not take into account benefits to the exchequer which this lending will bring in terms of increased tax receipts and decreased social welfare payments. When these benefits are taken into account, the net gain is over €25m per €150m of lending. The State will enter into an agreement with each lender and will accredit the lender to participate. The guarantee will be given to each lender for a collection of loans ( a portfolio approach) rather than individually (loan-by- loan-basis). The choice of loans which make up the portfolio is at the discretion of the lender, provided the borrowers meet the eligibility criteria. An Annual portfolio claim limit will be set for the aggregate value of loans for each lender, thereby capping the State’s exposure. Once a lender’s default claims have reached their claim limit, any further losses must be borne by the lender and will not be eligible to be reclaimed from the State. Both the borrower and the bank retain exposure in the event of default. The State is exposed only to the portion of the loan guaranteed up to a pre-specified limit. The period for which the guarantee is provided (as distinct from the term of the loan) is three years. The State Aid framework sets the requirement that a premium must be charged to the borrower in return for the State guarantee. Recipient businesses will be required to pay the Minister (the Guarantor) an annual premium of 2% on the outstanding balance of the loan, assessed and collected annually in advance. A qualifying enterprise must not employ more than 250 persons. There are a number of exclusions including primary production in agriculture, horticulture and fisheries, refinancing of existing debts and overdrafts and property- related activities. The food and drinks sector will be eligible for the Scheme.
AIB has launched a programme of supports aimed at helping startup businesses get off the ground, The supports form part of the bank’s Big Drive for Small Business initiative. Central to the programme is AIB’s Start UP Package which offers a range of incentives to people who open a Business Start up Current Account. These include: free banking for two years, an SME loan with a variable rate of 4.4% and 50% discount off the first years membership to an affiliated participating local Chamber of Commerce.
Word on the street however is that AIB are still not giving out loans to Small or Large Businesses!Looks to us as if AIB are merely going through the marketing motions!
The Credit Review Office received 44 applications from SME’s who have been refused credit by the two pillar banks AIB and Bank of Ireland between March and May of this year. The figures were revealed in a quarterly review of the Credit Review Office by John Trethowan. Trethowan said that while work was still ongoing on a number of cases that of all the cases completed during the three month period, 17 bank refusals were overturned, resulting in the banks supplying €2 million of credit. Since the Office’s establishment in April 2010, 35 per cent of all refusals have been overturned. Any business that has been turned down for a loan application should contact the Credit Review Office at info@creditreview.ie
Revenue has announced that they have appointed Michael Gladney as the new Collector-General. Mr Gladney headed up Revenue’s Limerick Tax District & South West Region’s Large Enterprise Audit Unit, prior to his appointment as Collector-General.
The previous Collector-General, Gerry Harrahill has been assigned as head of Revenue’s Corporate Affairs and Customs Division
Since its introduction in 2004, the research and development (“R&D”) tax credit has been improved and extended. Since 2009, cash refunds of unused R&D credits can be claimed. Finance Act 2012 has further improvements, including rewarding some staff by transferring R&D credits to them to claim income tax relief. A recent survey suggests fewer than 20% of Irish companies have made claims, so many companies must be missing out on this valuable relief. As defined, R&D is much broader than many realise, and covers far more than white- coated technicians in labs. Consider its potential application to your company, particularly if a cash refund is possible.
Expenditure that qualifies
Certain criteria must be met to be “qualifying activities” for the R&D credit, including the areas of science and technology where work was carried out. In some areas, R&D activity is obvious (e.g. pharmaceuticals) but software development, engineering, food production, health and agriculture are other areas where relief may be available. Companies often underestimate the categories of qualifying R&D expenditure. In addition to direct R&D costs, indirect expenses (support staff wages, rent, and many others) can be included by reasonable apportionment.
General overview
If it meets the conditions, a company can claim a corporation tax credit equal to 25% of its “incremental” expenditure on qualifying R&D activities over the “base year” spending level. The R&D credit is in addition to the “normal” 12.5% deduction. The incremental qualifying expenditure may be capital (a new building or machine) or revenue (salaries, materials) in nature, with direct and indirect expenditure qualifying. Grant-aided expenditure does not qualify. The activities need not be carried out in Ireland. Though aimed mainly at in-house R&D activity, sub-contracted work can qualify, subject to monetary limits.
Method of claiming credit
The claim is included in the corporation tax return, Form CT1. While no supporting documentation is needed on making a claim, it should be in place as Revenue often audit R&D claims, particularly where cash refunds of unused R&D credits arise.
Time limit for claims
Claims must be made within one year of the end of the accounting period in which the R&D expenditure was incurred. Any R&D tax credit not claimed by then is lost.
From 1 June 2012 the following categories of tax payers are obliged to file their returns electronically:
• All VAT registered tax payers • Self assessed individuals claiming certain income tax exemptions (Artists Exemption, Woodlands Exemption etc) • Self assessed individuals claiming certain income retirement reliefs (RAC payments, Relief for PRSA contributions etc) • Self assessed individuals claiming certain income tax reliefs (BES relief, EII relief, Seed Capital relief , Film relief etc)
Where a taxpayer is obliged to file and pay on ROS, the penalty for failing to do so is €1,520 each time a taxpayer fails either to pay or file on-line. Where there is a genuine difficulty with filing and paying on-line, taxpayers may on application to Revenue be excluded from electronic filing. TAX TIP: If you think you may be in a tax refund in respect of 2011, why not send in your return early and obtain your refund now!!!
Finance Act 2012 included an update on the rules surrounding the repayment of taxes outside a four year period. Previously claims for repayments of taxes outside a four year period, while not refundable by Revenue, would be available for offset against other tax liabilities. However Finance Act 2012 states that where a claim is lodged outside of the relevant time limit, offset against any other tax liabilities of the person is now prohibited. The only exception to this rule is in the event that Revenue applies to assess or recover tax in a period that is four years or more after the end of the year or period involved. In such a case, tax which cannot be repaid because of the application of the four year time limit but which relates to the same accounting period that is being assessed by Revenue retrospectively, will be available for offset against that liability. Taxpayers should ensure that any repayments of taxes due are claimed and received from Revenue within the relevant time limit.
Noone Casey has extensive experience within the media and entertainment industry. We understand the lives of artists and performers, and how the nature of their work leaves little time to look after finances. We believe we have a structured approach to ensure that your financial affairs and taxes are in order. Whether you are looking for international tax advice to reduce overseas withholding taxes or are starting a new band, we can sort you out.