Budget 2011 - Share Schemes

Budget 2011 made a number of changes to the tax treatment of gains arising from various types of share schemes, including making such gains chargeable to the new Universal Social Charge (USC). This note from Revenue outlines these changes and provides some general guidance on their likely impact.

Christmas Break

I would like to thank all the readers of my Blog and all Ardbrook's customers for a successful 2010 and wish you all a happy and prosperous 2011.

Ardbrook's offices will be closed from 1pm on Friday 24th of December until 10am on Wednesday December 29th

Budget 2011 - Year-End 2010 Check List

This is check list of reports and functions to be performed in your EuroPayX or PayDay payroll when closing off 2010 Tax Year and entering 2011 Tax Year. For more information see the documentation provided and/or manual. Once again if you have a week 53 ( In 2010 a payroll run date of 31st December) it must be done as a separate payroll  run and not be included in holiday weeks.

EuroPayX and PayDay Budget Update CD's

Ardbrook will post out the Budget update CD's for 2011 Today. If you require the update sooner please contact us, you can collect your CD by courier or receive your update via email or by download.

Budget 2011 - PRSI Class K

As part of Budget 2011 Office Holders for the purposes of PRSI are to be assigned to class K. Emoluments paid by public bodies to public office holders.

Budget 2011 - Revised Operation of Universal Social Charge

Previously we had been told that for all practical purposes we could ignore the lower €4004 threshold, however today Revenue stated that the arrangements for the treatment of the lower threshold of Univeral Social Charge (€4004) has been changed so that those earning €4004 are not to be subjected to charge.

Revenue - Employer Copy of Tax Credit Certificate

Employer’s copy of  employees Tax Credit Certificates (P2Cs) will issue through the Revenue On-Line Service by the 15, December 2010. For Employers/Agents not registered for ROS, these certificates will be sent by post during the week commencing 13 December 2010.

Budget 2011 - The Parking Levy

The Ministerial Order to introduce the Parking Levy was signed in July 2010, and can be introduced at any time, subject to 3 months notice. It is unlikely the Parking Levy will go live prior to 1 April 2011, and will only if the designated areas in which the levy will apply are published and the 3 months notice of implementation given.

Budget 2011 - Irish Payroll PRSI Clarifications

Confirmation from Welfare for Class K - if earnings less than or equal to €100 in a week record as M.

Employee and Employer reckonable earnings for PRSI purposes are to be calculated independently, and at the relevant rate in respect of each seperate amount. This leads to the potential problem where employee and employer PRSI are returned at two different PRSI classes. To avoid this the return (contribution) will always be at the subclass designated by the employee reckonable earnings.

Advance Notice to computer users for PRSI changes now available on welfare.ie click here

Budget 2011 - Irish Payroll USC Clarification

The €4,004 yearly exemption is to be applied for to the Revenue only at the end of the year.  It is not to be broken down into weekly/monthly/etc equivalents to be applied in weekly/monthly/etc payroll.  This is different to the Income Levy where the €15,028 was broken down and applied weekly/monthly/etc.   Throughout the year the only thresholds/rates to be applied in payroll are €10,036 @ 2%, the next €5,980 @ 4% and the balance at 7%.  Folks aged 70 or over pay a max of 4%, starting above €10,036. This exemption it has to be applied for at year end to the revenue commissioners by the individual employee.


DISREGARD!

THIS HAS NOW BEEN CHANGED BY DEPARTMENT OF FINANCE TODAY 15 December 2010

Budget 2011 - Emergency Tax Credits and Bands

With the revised tax credits and Cut Offs for Irish payroll for 2011, when calculating tax on an emergency basis the credits and cut offs are as follows

Budget 2011 - Pension changes

Pension changes for Irish payroll introduced in Budget 2011

Employee PRSI on pension contributions

From 1 January 2011, employee contributions to occupational pension schemes and other pension arrangements will be subject to employee PRSI and the Universal Social Charge. The PRSI change will be legislated for in the Social Welfare Bill.

Employer PRSI on pension contributions

The current employer PRSI exemption for employee contributions to occupational pension schemes and other pension arrangements will be reduced by 50% from 1 January 2011. The change will be legislated for in the Social Welfare Bill.

Budget 2011 - PRSI Changes

The several changes to the calculation of PRSI in Irish payroll for 2011 as follows:

Employers

There are some changes to rates for 2011.

The Minister announced an Employer Jobs Incentive Scheme for 2010, this scheme has been extended for 2011. Where an employer creates a new job and takes on a person who has been unemployed for at least six (6) months, the employer will be exempt from paying Employers PRSI in the respect of that person’s employment for a period of one (1) year from the date of commencement.

Budget 2011 - New Universal Social Charge

For Irish payroll the new Universal Social Charge is a combination of the old Income Levy and the Health Levy.  The Universal Social Charge effective 1 January 2011, is payable on Gross Income before any
relief for Pension Contributions, Capital Allowances or Losses. All individuals are liable to pay the Universal Social Charge, if their gross income exceeds the threshold of €4,004 per annum. Medical card holders are not exempt from the Universal Social Charge.

Budget 2011 - Other changes

Other changes that may have an impact on the running of Irish payroll in tax year 2011 are as follows:

• Abolition of Tax relief on Trade Union subscriptions
• Abolition of Tax relief on subscriptions to professional bodies
• Abolition of Tax relief on approved share option schemes
• Abolition of relief on BIK for employer provided childcare

Budget 2011 - Public Service Pension-related Deduction Changes

From 1 January 2011, the pension-related deduction which is charged to earnings in the public service will be subject to employee PRSI and the Universal Social Charge to be introduced on 1 January 2011. The PRSI change will be legislated for in the Social Welfare Bill.

Budget 2011 - PAYE Tax Credits and Bands

Tax Rates

• The Standard Rate remains at 20% and the Higher Rate is unchanged at 41% or 40% if Marginal Rate applies (the marginal rate is unchanged).
• The Sub-Contractor rate has changed it is now for sub contractors registered for tax with an established compliance record at 20%  and 35% for sub contractors not registered for tax.

Budget 2011 - Main Points

The main points of budget 2011, in particular those relating to the calculation of irish payroll are:

• No reduction in state pension
• €10 reduction in Child Benefit in both lower and higher rates, additional reduction of €10 for third child
• Extension of Employer's PRSI incentive scheme to 2011

Revenue - eRegistration

Monday 29th November 2010 saw the introduction of an increased range of eRegistration services through Revenue’s Online Service (ROS) These services include:-

Lastest Budget 2011 Predictions

With Budget 2011 only a day away here are some of the latest predictions for what that budget might contain

• Employee PRSI ceiling to be abolished, currently at €75,036
• A lowering of personal income tax bands and credits or equivalent measures
• A reduction in pension tax relief and pension related deductions

PayDay - Printing Screens

Within the PayDay irish payroll software package, both the Employee Details and Adjust and Calculate/Payslip screens can be printed by pressing the F12 Key.

Budget 2011 details revealed in Recovery Package MOU

The Memorandum Of Understanding about the Recovery Package published yesterday seems to imply that there will be changes made to the revenue systems during 2011 (as opposed to at the start of the year). The document refers to a "yield €945m in 2011 and an extra €300m in a full year" when it discusses changes to personal tax bands and credits.

This would seem to indicate that the values will change after the first quarter of 2011 and that these changes will not be retrospective. In other words, we could have two (or more?) separate cumulative systems running during 2011, or that the existing bands and limts will run into the new tax year and the revised tax credits and bands only come into effect after Q1?

EuroPayX - Now you can email P60's and Levy Certs

For this tax year end Ardbrook have added the option to our EuroPayX irish payroll software to enable you to email P60's and Year End Income Levy Certs to your employees. If you already use the email payslip facility then this option is for you.