Supported by

High-quality training and

networkingevents

PAYE modernisation and 9 other essential things about business taxation

November 2018

18.00pm Welcome & introductions

18.05pm Member Spotlight

18.10pm Catherine McGovern, Tax Partner, PKF O’Connor, Leddy and HolmesCatherine will discuss some of the topical tax issues affecting businesses today together with some very valuable business tax reliefs.

18.50pm Tara Lillywhite-Torpey, Partner, EYTara will examine the rising costs of doing business and who takes what of your euro earned.

19.10pm Q&A

19.30pm Closing remarks & event close

7th November 2018

Catherine McGovern

Tax Partner

Topical Tax Issues

PAYE Modernisation

VAT Consideration

Topical Tax Issues

1st January 2019

• Returns - Real Time- Live- Monthly

• Need- Accurate on time data- Get returns right first time- All employee information available

• Cost of errors

PAYE Modernisation Overview

What are the changes from 1st January 2019?

6

• The Tax Deduction Card (P2C) Revenue Payroll Notification (RPN).

• Eliminate P30, P35, P45, P46 Returns and P60 for employees.

• Real Time Reporting – Live data.

• The employers will report to Revenue details of any employees starting or leaving the

employment at the same time as they run their payroll.

i. The amount of remuneration paidii. The date of the payments andiii. PAYE, USC and PRSI due

Employers will need to Notify Revenue on or before the payment of

emoluments for each employee:

What are the changes from 1st January 2019?

7

• Revenue will issue summary statements to the employer.

Deemed to be the employer return if no action is taken (by employer by 14th of the following month).

• Each Monthly Return is a Statutory Return - Previously only one Statutory Return P35.

• The employees will have full visibility of the data reported to Revenue in real time.

• Register of employees.

What now?

8

PAYE REVIEW DATA : Review Systems & Procedures

PAYE Calculations

Are you ready?

HR ManagerFinance

Payroll

System

1. DATA: Review System & Procedures

• Information from different sources

• Co ordinate information

• Timing of information

Are you ready?

Company & Directors Loans

Contractor v Employee Emergency Tax

Professional Subscriptions

Are you ready?

2. PAYE Review

- Employer liable for PAYE on re-grossed basis

• E.g. Motor and Travel records not sufficient

- Employee paid €1,000 expenses

New legislation 1st January 2018

Example

Cost to Employer

PAYE USC & PRSI €1,083

ER PRSI €224

Total Tax €1,307

Net Payment €1,000

Total €2,307

*Before interest and penalties

PAYE Review

1st January 2019

What next?

7th November 2018

Catherine McGovern

Tax Partner

VAT

VAT Overview

15

Business VAT

Property VAT

Cash Receipts

Turnover < €2million

Management Charges

Correct VAT RatesGroup VAT

Registration

VIES & Intrastat

& Annual Return Trade Returns

VAT Deductibility Adjustment

Invoice outstanding > 6 months

Bad Debt Relief

% VAT deductibility

VAT Reviews

Reverse Charge VAT on EU Transactions

17

E.g. Business to Business

€10,000 Invoice

0% VAT on Invoice

Issues:

- Actual VAT Cost?

- VAT Return Entries

Reverse Charge VAT on EU Transactions

18

€

Irish VAT Return VAT on Sales 2,300

100% deductibility

VAT on Purchase (2,300)VAT Liability 0

50% deductibility VAT on Sales 2,300VAT on Purchase (1,150)VAT Liability 1,150

- Specific Entries on VAT Returns and Annual Return Trade Details - Revenue Reviews

Commercial Property VAT

19

1. Sale / Acquisition – VAT

- VAT Position?- Depends on specific history of building- 13 ½ % ?- Residual Historical VAT?- Physically Pay VAT / Deemed VAT?- VAT Review required pre acquisition

2. Leases

- Substantial VAT changes 1/7/08 - VAT Review

- Grant new lease- Surrender lease- Subleases

3. Capital Good Records

- Revenue Reviews

Commercial Property VAT

20

Example 1

Background

- Grant 25 year lease on 1/1/05 @ €100,000 per annum

- Deemed VAT €253,125 on 1/1/05.

- Lease surrendered 30/11/18

VAT on Surrender Implications?

- Deemed VAT €88,595 on surrender

- Deemed remaining 7 VAT years

- Tenant Works ? - Residual VAT? - Impact future sale?

- VAT Return Entries

VAT on New Lease?

- VAT Implications for LL on Surender

- Grant New Lease 1/1/19

- VAT @ 23% on New Lease

- Specific VAT clauses in lease

- To Avoid VAT Cost €88,595 to LL

Commercial Property VAT

21

Example 2

- Tenant granted 25 year lease on 1/1/05.

- Tenant sublet 30% property in July 2018

- Tenant has to charge VAT @23%

- To avoid partial VAT Clawback

Summary

22

1. PAYE Modernisation – 1st January 2019

2. Time for PAYE and VAT Reviews

Are you ready?

PKF O’Connor, Leddy & Holmes Limited

Century House, Harold’s Cross Road

Dublin 6W

01 4961 444 | www.pkf.ie | info@pkf.ie 24

Feel free to contact us should you require any further information

Catherine McGovern

Tax Partner

c.mcgovern@pkf.ie

Audrey Curran

Payroll Manager

a.curran@pkf.ie

The costs of doing business – who takes what of your euro earned!

Tara Lillywhite - Partner

0%

20%

40%

60%

80%

100%

120%

Cost Categories Non Controllable Final outturn

Labour Salaries, pensions and other Facility Costs

Transport Costs Utility Costs

Capital Costs Taxes

Supported by

Questions?

Supported by

Thank you