20

WAYS TO INCREASE

YOUR PROFIT THIS YEAR

1. MAKE USE OF LOSSES!

You may be able to carry forward any losses from previous years against future profits, or set them against other income for
immediate tax relief. Make sure your accountant reviews and advises on the most tax efficient treatment for your business.

2. CLAIM THE CORRECT MOTOR & SUBSISTENCE

When it comes to motor expenses, lots of people simply claim the specific amount of mileage they have used. However, it is often
useful to note that Revenue will accept payment of mileage and subsistence rates based upon civil servant rates. These rates can
be quite beneficial to Directors and employees. Remember though that proper records and control systems must be in pace to
substantiate claims.

3. DONT PAY VAT TOO EARLY

Ensure your Accountant has registered your business to return VAT on the cash receipts basis. This means you only pay VAT
to Revenue when you have received payment from your customers. The crucial benefit here is that you can also reclaim VAT on
purchase invoices paid and unpaid for the relevant VAT period, easing your cashflow somewhat.

4. CHECK YOUR STAFFS TAX CREDITS

As well as checking your own tax credits you should also ensuring your staff members tax credits are correct. You do not want
the surprise of having to pay a large refund of tax to a staff member in Month 4 and then wait a number of months to receive the
refund from Revenue.

5. PUT PENSION SCHEMES IN PLACE FOR YOUR EMPLOYEES

Operating a company pension scheme can have significant tax savings for your business. Employers can save10.75% employer
PRSI on payments made into a company pension scheme on behalf of staff members.

6. DONT MISS OUT ON CAPITAL ALLOWANCES

Depreciation of assets is not tax deductible, however capital allowances is a form of tax deprecation that can reduce your taxable
profits. Ensure you keep accurate records of all assets bought and sold to guarantee your accountant can calculate accurate
capital allowances.

7. TRAVEL PASSES/BIKE TO WORK SCHEMES

It can be beneficial for both you and the employee to implement these schemes, saving you 10.75% Er PRSI on the cost of the
travel pass or cost of the bicycle.

8. DONT FORGET TO RECLAIM VAT ON DIESEL

If you reimburse employees who use their own vehicles for legitimate business travel to clients premises, you are entitled to reclaim the VAT on diesel relating to this expense. VAT on unleaded petrol cannot be reclaimed.

9. OTHER ASSETS
Normally you receive a tax deduction over 8 years when purchasing certain assets, however an accelerated tax deduction (100%
in the year of purchase) is available for certain energy-efficient machinery/technology purchases, for example computer-based
systems, designed primarily to monitor and control building energy use or Efficient Heat Conservation and Recovery Equipment.
This green allowance scheme relates to assets purchased before 31 December 2014. Be sure you talk to your accountant to
attain a more definitive list of assets and ensure you are claiming all that you can.

7 Fairview Strand, Fairview, Dublin 3

Tel: 1890 987 609
www.taxassist.ie

10. CLAIM CORPORATION TAX RELIEF

If you set up your company in the past number of years and you employ a number of staff, you might be entitled to claim the corporation tax relief, based on the amount of ER PRSI your company pays. If you havent generated a profit the relief can be carried
forward indefinitely.

11. MOVE FROM A SOLE TRADER TO A LIMITED COMPANY

It may be time for you to consider moving to a limited company structure to save tax. It is important to consider the commercial
and tax issues before deciding to do so. A key area to examine is if the company has significant spare cash available each year
and if you are starting to pay tax at the top rate of 41%. If so, it may be advantageous to incorporate.

12. PAY INTO A PENSION SCHEME

Setting up a company pension scheme for directors can save tax as the company can contribute generous amounts over and
above the directors own personal tax relievable limits. A portion of the pension can be drawn tax free upon retirement.

13. CONSIDER EMPLOYING YOUR SPOUSE/CIVIL PARTNER

Employing a spouse in your company may allow you to claim the maximum standard rate tax band and pay more tax at 20%
rather than 41%.

14. CLAIMING RETIREMENT RELIEF

When deciding to retire or exit a company, selling your shares may be exempt from tax as a result of CGT retirement relief. If you
are planning on selling your shares and are aged 55 or over, relief of 500,000 up to 3,000,000 may be available, depending on a
couple of factors, such as your age or who you are selling the business to.

OWN A PROPERTY?
15. TAKE ADVANTAGE OF THE HOME RENOVATION INCENTIVE
The home renovation incentive is now available to landlords for investment properties. Essentially, it allows for an income tax credit
at 13.5% of qualifying expenditure on repair, renovation or improvement works carried out on a main home or rental property by
qualifying contractors.

16. RENT A ROOM IN YOUR HOUSE

You can earn up to 12,000 tax free by renting a room to an unconnected person, in your principal residence.

17. MAKE SURE YOU CLAIM FOR MORTGAGE PROTECTION POLICIES

One area that is commonly omitted when preparing rental accounts is the inclusion of mortgage protection policies. Payment of
mortgage protection policies aimed at covering the full amount left outstanding on a persons mortgage should they die, should be
deducted when calculating rental profits.

PASSING ON WEALTH TO THE NEXT GENERATION

18. SMALL GIFT EXEMPTION
You can gift up to 3,000 per year to each child without attracting gift tax. Therefore a parent can plan in advance by gifting
3,000, to each child, for a number of years tax free before transferring other assets to reduce the overall value of assets/estates
gifted/inherited.

19. TRANSFERS BETWEEN SPOUSES

There is no Gift/Inheritance tax on transfers of assets between spouses.

20. BE SURE NOT TO PAY CGT AND CAT ON THE SAME TRANSACTION/EVENT
Where for example an investment property is transferred from father to son (CGT is payable by the father on transfer, CAT is
payable by the son on the gift), the CAT payable by the son can be reduced by the amount of CGT payable by thefather. The sons
CAT bill can also be reduced by the stamp duty paid on the gift of an asset.