Dear Reader

Welcome to the August edition of our bimonthly tax update. In todays issue we have highlighted details on the new 'Living City Initiative' tax relief, tax clearance certificates going on-line, employees' subsistence expenses allowances and information on the decrease of the UK corporate tax rate.

We hope you'll find the update useful and if you have any queries don't hesitate to contact us by email at info@quintas.ie or call 021 4641400.

City Living

Live in a “special regeneration area” of one of our large cities and avail of the new “Living City Initiative” tax relief on a portion of expenditure on residential or commercial property improvements or conversions, over the next 5 years. This relief largely applies to Georgian properties in city centres.

This residential relief is available to an owner-occupier, by way of a deduction from total income of 10% per annum of qualifying expenditure over a 10 year period. For the commercial element of this initiative the tax relief is given over a 7 year period, by way of an accelerated capital allowance of 15% for 6 years and an allowance of 10% in year 7. 

This relief is largely insignificant because it excludes any house over 2260sq feet and you would think this restriction will exclude the majority of Georgian housing in our cities.

Tax Clearance Certificates going On-Line (eTax)

Tax Clearance will be available online from January 1^st 2016, in line with the Finance Act of 2014. Certificates issued currently will have an expiry date of March 31^st 2016.  From January 1^st 2016, all applications will need to be submitted through Revenue’s new electronic system eTC where upon Tax Clearance status will be verified by way of a “Tax Clearance Access Number” via ROS.  Applicants will be issued with a Tax Clearance Access Number which they will give to the public service body who will then verify their tax clearance status.

Employees’ Subsistence Expenses Allowances

Subsistence expenses allowances have been changed. The following table details the rates effective from 1^st July 2015. A day allowance is considered to be a continuous absence of 5 hours or more in a location which has to be 8km (note this has increased from 5km) from an employee’s home or normal place of work.

An Overnight allowance will be paid where the location is over 100km away from the employees home or normal place of work. This may be reduced to 50km where it can be proved that an occupational need exists for the employee to be away from their home.

Please note that the Department of Finance have recently issued a consultation paper on travel and subsistence rates.  Once this process is complete we should get absolute clarity on what is allowed and what is not in terms of travel expenses, hopefully….

U.K. Corporate Tax Rate Set To Decrease

The U.K. Corporate Tax Rate is due to decrease to 18% by 2020.  This rate of tax has seen a gradual decrease of 10% over the last decade.  Ireland will need to react to this announcement and ensure that we retain and increase our foreign direct investment which is critical to our continued economic recovery and growth. While our own corporation tax rate will not decrease any further, other incentives such as the R&D Tax Credits, the new Knowledge Box Relief and our treatment of Foreign Dividends needs to be improved.