Changes to the operation of Relevant Contracts Tax (RCT)

On Budget day, 7 December 2010, the Minister for Finance announced that significant reforms would be made to the Relevant Contracts Tax (RCT) scheme to enhance its effectiveness, reduce opportunities for fraud and help decrease the administrative burden for businesses and Revenue. The Finance Act (enacted on 6 February 2011) gives a legislative base to the reform of the RCT scheme. The provisions are contained in Section 20 of the Act. In essence, the Finance Act amends the Taxes Consolidation Act in Chapter 2 of Part 18 by inserting twenty-two new sections after Section 530. These sections comprise a new scheme of RCT, which will replace the current scheme on a date yet to be decided.
The key elements of the new scheme as outlined in the Act are:

EuroPayX - Attach documents to Employee Records

In our EuroPayX irish payroll product it is now possible to link related documents to an employees record. These documents can be in any format such as word, excel or pdf, they can even be scanned from source material enabling you to access an employees complete record from within your payroll software.

Universal Social Charge (USC) Amendment

As a result of the recent enactment of the 2011 Finance Act, there has been a significant change to the USC For an individual holding a current Full Medical Card the maximum rate of USC is now 4% instead of the previous 7%. The employer must satisfy themselves that the employee hold such a card before implementing the change. This change is backdated to 1 January 2011.

Special Contributors to PRSI

Following consultations between the Revenue Commissioners and the Department of Social Protection (http://www.welfare.ie/EN/Topics/PRSI/Pages/specindex.aspx), it has been decided that PRSI should be returned through normal P30/P35 procedures in cases subject to PAYE Exclusion Orders. Heretofore, PRSI for these employees were remitted separately to the Special Collections Section in Waterford.

P35 Refunds and P35 Amendments

P35 Refunds

To avoid delays in the processing of refunds that arise from the end of year P35 paper returns, taxpayers and their agents should note that:

New changes proposed to USC

The minister for finance Mr Brian Lenihan has said that he will introduce the following changes to the implementation of the Universal Social Charge

• Medical card holders will not have to pay USC at the top 7% rate only at the lower rates
• The self-employed will pay an extra 3% surcharge on earnings over €100,000.00

We will post further details as they become available.

WORKING TIME ACT – TIME FOR A CHANGE?

Working time legislation has been in place since 1997. The basic thrust of the regulations is that workers may not work more than an average of 48 hours a week, are entitled to daily and weekly rest periods, and to 4 weeks’ paid holiday. Of course, no legislation, particularly coming from Europe, is ever quite so simple. The average hours are calculated over a 4 month period; young workers can only work 40 hours a week, certain sectors of workers are excluded; and the definition of what constitutes work is open to disagreement.

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.