Employment Tax

1. Redundancy
There are special tax reliefs available where individuals receive lump sum payments from their employer when they are either being made redundant or retiring. There are certain minimum exemptions, which can then be increased depending on your length of service with the company. 
The position is further complicated by what happens to your pension rights if you are a member of a company pension plan.  

Where a part of your lump sum is taxable then an additional special tax relief may be claimed based on your average rate of tax for the three preceding tax years.

2. Locating to Ireland
Where certain conditions are satisfied, an employee can make a claim to have a proportion of his or her earnings from the employment with the relevant employer or with an associated company disregarded for income tax purposes.

SARP relief
Over the past number of years a new relief has been inserted into the Taxes Consolidation Act 1997. 

The relief is known as SARP. The relief operates by allowing a 30% deduction from any employment income in excess of €75,000.

The Special Assignee Relief Programme is specifically aimed at employees who have been assigned by his or her employer to relocate to Ireland to work for that same employer.  

In order to avail of the relief, the individual must: 
  • have a base salary of at least €75,000
  • be a full-time employee of a company tax resident in a country with which • Ireland has a Double Taxation Agreement (or information exchange agreement) for 6 months immediately prior to arrival; 
  • arrive in Ireland to perform duties for their employer or with an associated company of their employer – i.e. the relief does not apply to organisational “new hires”; 
  • become tax resident in Ireland; and,
  • Not has been tax resident in Ireland for the five tax years immediately preceding the year of arrival.

Where SARP is claimed, the individual may also benefit from the following on a tax free basis:
  • One “home leave” trip per year for the individual and his/her family. 
  • 2. School fees of up to €5,000 per child, per annum.

The above payment/reimbursement of travel costs/tuitions is not subject to PAYE/USC or PRSI.

Employee reporting requirements
A relevant employee who claims SARP is deemed to be a chargeable person for the purposes of self-assessment and is therefore required to submit a return of income to Revenue in respect of each year for which relief is claimed. 

You will need to file a Form 11

Employer reporting requirements
The Employer will need to complete a SARP1a application form (within 30 days of the employee’s arrival to Ireland) and a SARP employer return (due by 15 February each year/coinciding with the P35).

SARP relief can be claimed on a real time basis i.e. through payroll. Employers need to be aware that SARP relief. It is important to note that income that is disregarded for income tax is not exempt from USC and PRSI.

What do I need to do next employee/employer?
  • Review assignment policy in light of the new SARP rules introduced. Especially around the cost of school fees and home trips. Review all compensation in light of the above mentioned.
  • Ensure that payroll can process SARP applicants on a real time basis.
  • Consider professional tax advice for both the employee and employer – it is essential that the employer understands how SARP impacts on the payroll.
 
  • Year of Arrival – other reliefs for inbound assignees

It is possible for an individual who is resident in Ireland (i.e. he/she meets the condition of Irish tax residence) for the year of arrival to not be taxed on remuneration from an employment exercised outside Ireland in the part of the year before he/she arrived in Ireland. For this to apply, certain conditions must be met - including that the individual must be able to evidence to the satisfaction of the Irish Revenue Commissioners that he/she will be Irish tax resident in the following tax year.

Tax Returns

As a registered tax agent, we prepare and file returns for income tax, corporation tax, capital gains tax, VAT, employer PAYE and capital acquisitions tax (CAT).

Typical costs for filing a personal tax return range from €450+ VAT depending on complexity.
​
An initial meeting costs as little as €250 + VAT for 60 minutes, and this is credited against the cost of preparing and filing your tax return should you decide to use us as your agent.

​Non Resident Tax Returns

If you own a rental property in Ireland, you’re legally obliged to file an annual self-assessed tax return with Revenue.
You are considered to be a non-resident landlord if you reside outside Ireland, but have rental property located in the State. As a non-resident landlord, you are still liable to pay Irish income tax on income from rental properties within Ireland and, therefore, you must file an Irish Tax Return each year. The tax year runs in line with the calendar year and is due to be file by the 31st October of the following tax year.

The easiest way to file a non-resident tax return is to appoint a Collection Agent.

A Collection Agent is someone who assumes the responsibility of submitting your tax returns and paying your tax liability on your rental properties. The Collection Agent will make an annual tax return and account to Revenue on your behalf for any tax due under the self-assessment rules. The agent appointed does not need to be a professional person – rather, they can be a family member or other trusted person who is prepared to do so.

Sole traders –
​Account preparation and submission to Revenue

You must keep full and accurate records of your business from the start. You need to do this whether you send in a simple summary of your profit/loss, prepare the accounts yourself, or, have an accountant do it. It is important for you to remember that the figures which are contained in your accounts, or your summary of profits/losses, or your tax returns, must be correct. The records you keep must be sufficient to enable you to make a proper return of income for tax purposes.

Self-employed persons ( People carrying on their own business) must return an Income Tax return. An Income tax return is covered under the self-assessment system. Under Self-Assessment there is a common date for the payment of tax and filing of Tax Returns, i.e. 31 October. This system, which is known as 'Pay and File’, allows you to file your return and pay the balance of tax outstanding for the previous year at the same time. Under this system you must:
  • Pay Preliminary Tax for the current tax year on or before 31 October each year,
  • Make your Tax Return after the end of the tax year but not later than the following 31 October. 
  • Pay any balance of tax due for the previous tax year on or before 31 October.

​Ad hoc tax consultancy

  • SARP applications to Revenue
  • Rental property owners
  • Trust income tax Form 1 returns