The Household charge applies even if you are not resident in Ireland.  It applies to all Irish situated residential properties, regardless of whether such properties are an individual’s main residence or an investment property owned by an individual. The household charge can be paid online from the following website  www.householdcharge.ie  

 

It is important to note that this household charge is in addition to the Non Principal Private Residence (NPPR) charge that was introduced in 2009.  The NPPR also applies to Irish properties that are not occupied as your principal private residence. The NPPR charge is €200 per year and is due for payment this year no later than 31 May 2012.

 

 

 

The amount of tax you would pay on your net rental income would depend on your other sources of income.  For the 2011/12 tax year, if your total sources of income (including your net rental income) less your personal allowance of £7,475 are less  than £35,000, you would pay tax at 20%; if between £35,001 - £150,000 you would pay tax at 40% and if greater than £150,001 you would pay tax at 50%. 

 

In order to take your tax affairs up to date, you would need to make a voluntary disclosure to HMRC for each year that you have received rental income.  It would be important that you could demonstrate how the property was funded, details of the rental income received and proof of the expenses incurred for each respective tax year. 

 

If you are not Irish, you will need to produce your passport or national identity card or your Immigration Card and evidence of your address, such as a household bill (electricity, telephone, gas, etc.) in your name.

Only the Department of Social Protection can provide you with a PPS Number. You can find a list of the Social Welfare Local Offices that can register Personal Public Service Numbers on the Department of Social Protection's website.

You should also advise your new employer that you are a UK medical card holder to exempt you from paying USC at the higher rate of 7% on your employment income.

Question

I understand most VAT registered businesses have been required to submit their VAT returns online since April 2010. I did not move to Online VAT as my turnover was not over £100,000.  Can I continue to submit paper returns in the future?

From 1 April 2010, if your turnover was over £100,000 or you registered for VAT on or after that date, you automatically had to register to do your VAT return online and pay any VAT due electronically.  Everyone else could continue to do paper returns.

Now from 1 April 2012, all remaining VAT registered businesses will also have to submit their VAT returns online and make payment electronically  If you are still submitting paper returns we would strongly advise that you sign up to the HMRC online VAT service well before 1 April 2012 so you have adequate time to get familiar with the process and can also set up the electronic payment process.

Using the online system will normally give you 7 extra calendar days to submit your return and pay your VAT liability, unless you make annual returns or payments on account.

The only exemptions from the new online filing regime will be businesses subject to an insolvency procedure, although if you are subject to an approved voluntary arrangement, administration or trust deed you can still submit online if you wish. The only other exception to this is if your business is run by practicing members of a religious society whose beliefs prevent them from using computers.  

 

Expenses incurred in relation to acquiring and disposing of the property, for example, solicitor and auctioneer fees are allowed as a deduction. It may also be possible to claim a tax deduction for any enhancement expenditure incurred on the property, for example, any extension costs.

The first €1,270 of the gain is exempt from Irish Capital Gains tax, with the remaining gain chargeable at a rate of 30% for disposals after the 7 December 2011 or 25% if before this date.

The due dates for payment of any CGT to Irish Revenue commissioners, was the 15 December 2011 for disposals between 1 January – 30 November 2011 and, 31 January 2012 for disposals in December 2011.  Failure to make payment by these dates will result in interest being applied to the outstanding amount 0.0219% per day.

 

If you have a P45 form from either a previous part time job or state benefits you should give this to your new employer.  Otherwise, you will be asked to complete a form P46 confirming if this is your first job, main or only job, or your second source of income.  This will ensure the correct PAYE tax code is allocated to you.

 

As the tax free personal allowance for under 65’s is £7,475 for 2011/12 the basic tax code is 747L.  The use of this tax code will ensure that you do not pay tax on the first £143 earned per week.  Therefore, if you start work in week 10 and you have no other earnings from 6 April 2011; you will not start paying tax until your income exceeds £1,437.

 

If your tax code is 747L week 1 basis this means that you are taxed weekly rather than on a cumulative basis.

 

You will also start paying national insurance immediately on all earnings above £139 per week as, unlike income tax, the lower earnings band for national insurance is not cumulative.

 

If, like most graduates, you have an outstanding student loan, then depending on the level of your earnings, you may also have student loan repayments deducted from your earnings.

 

An individual who is a sole trader who borrows money to use for that business will be able to claim interest relief on the interest element of the loan under the “wholly and exclusively” principles which relate to any business expenditure.  In order for the business to take a deduction for the loan interest HM Revenue & Customs will wish to ensure that the money borrowed is exclusively for trading activities.  The same would also apply to individuals who borrow money to acquire property for the purposes of a property business. 

A sole trade business may be able to obtain relief for interest paid on a loan used to purchase stock or plant and machinery used by the sole trader.  The relief is given as a deduction against net income like any other business expense.  Note that if the loan is used for purchasing stock or plant and machinery and any stock is taken personally by the sole trader or the plant and machinery is not used wholly for the purposes of the business then the relief is restricted in proportion to the non-business use.

You can make as many claims as you like in a year, but there are rules on the minimum claims which can be made.  These rules vary from country to country, but are generally €400 if the claim relates to a period of between three months and one year and €50 if it covers a whole year.

If you have discovered an invoice that should have been included in a previous claim, it can’t be included in the next one, as it won’t match the dates of that claim.  This will lead to the claim being rejected and so the invoice will have to be removed and the claim resubmitted, delaying the refund.

Instead, keep the invoice until the final claim of the year, then all the remaining invoices for that calendar year can be claimed together, so no VAT will be lost.