Kieran Coughlan: One of busiest tax times for VAT, PAYE, Capital Gains, etc

The coming few weeks is perhaps one of the busiest times on the tax front, covering VAT, PAYE, Capital Gains Tax, and a new income tax charge for certain pension products.
Kieran Coughlan: One of busiest tax times for VAT, PAYE, Capital Gains, etc

Firstly, from a VAT perspective, this month sees the final VAT return to be returned for 2016, whether VAT registered traders operate on two-month, three-month, six-month, or 12-month instalments.

Along with filing the VAT return, many traders will also be required to submit a Return of Trading Details (RTD), coinciding with the end of their accounting period.

Revenue have since 2014 been enforcing the requirement for traders to submit an RTD form, which breaks down purchases and sales for the year by VAT rate.

From a farming perspective 0% purchases such as fertiliser and feed, exempt purchases such as insurance and bank interest, and 0% sales such as fodder, grain and silage, must be documented correctly on the RTD form.

Revenue’s systems compare data from a variety of sources; it is important that the RTD is prepared accurately. Failure to file the RTD generally results in a delay of VAT repayments until such returns are brought up to date.

VAT 3 returns are to be filed by January 19, or January 23 for online filing.

From a PAYE perspective, new rules introduced from December 5 place the onus on employees who are taking up a new job or a second employment to register their employment directly with Revenue through the “MyAccount” web portal.

This involves employees registering for MyAccount at here. To register for MyAccount, an employee should have their date of birth, PPS number, phone number, email address and home address to hand.

The new system will undoubtedly create issues for persons with computer literacy issues, and employers may need to step in to assist employees in registering.

From an employer’s perspective, this new system will require creation of new procedures to ensure that employees register in good time and allocate tax credits correctly to their new employment.

For employees leaving an existing employment, to take up another employment with the same year, the roll-out to the MyAccount system is not yet mandatory, as the employer can register the employee with the employee’s P45.

Employer PAYE returns (P30) for the two and three month periods ending December 31, 2016, are due for filing by January 14, with an extension to January 23 for online filing. As the final P30s for 2015 are filed, this kick-starts preparation of the whole of year employer returns (P35s), which are due for filing by February 23.

For Capital Gain Tax, for any persons who have had a taxable capital gain on disposal of capital assets, next Sunday, January 15, is the final deadline for payment of such Capital Gains Tax in respect of the period December 1, 2016, to December 31, 2016.

Payment should be forwarded to the Revenue Commissioners together with Form CGT-B.

Moving on, as covered here last week, new rules have been introduced by the Finance Act 2016, in relation to the PRSA and RAC pension products, aimed more particularly at those aged over 75.

Finance Act 2016 was signed into law on December 25, 2016. The Finance Act requires relevant administrators to operate 40% income tax on such policies, where they are not paid out or converted within 30 days of the passing of the legislation, in the case of persons over 75 at that time, or 30 days of reaching 75 in the case of persons reaching that age after that date.

Although the legislation provides a transitional period, such that persons caught by the new rules have up to March 31 to access their policies, it seems an anomaly in the legislation requires that such income tax payments are made by January 24 (for those over 75 at the date of signing of the legislation).

But such income tax can be refunded from Revenue, if such policies are activated in the relevant timeframe.

According to one of Ireland’s largest pension providers, these new rules could affect perhaps more than 1,000 PRSA or RAC holders, and the advice is that holders of such policies, either over 75 or approaching 75, should immediately contact their policy administrator, to discuss their options. As always, persons should obtain relevant professional advice appropriate to their own circumstances.

Chartered tax adviser Kieran Coughlan, Belgooly, Co Cork. (086) 8678296 

* Reminder: final opportunity to book your place at next week’s Farming Law & Tax Seminar.

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