Seasonal reminder to employers- Burke Accountants

2022 signals a number of notable changes coming down the tracks

Burke Accountants of Daisyhill Manor, Ballyconnell, and Main Street, Belturbet, have a number of helpful seasonal reminders for employers across the region.

The local accounting, payroll and financial services firm say it is “worth noting” that the small gifts exemption remains available. This means that if an employee or an employee director receives a voucher from their employer up to the value of €500, it can be given tax free. No payroll taxes are applied and it is also a tax-allowable expense for the employer. “With the expense of Christmas, it can be a very worthwhile mechanism for employers to express their gratitude to their employees and also gain the tax advantage of it. It is also available to proprietor directors working in their own companies. It is a worthwhile relief.”

Come 2022, there are a number of other notable changes coming down the tracks. Chief among them is that the minimum wage will rise from €10.20 to €10.50 per hour from January 1.

In tandem, the ceiling at which Universal Social Charge is applied at 2% will also increase to €21,295.

The Standard Rate Bands, at which Income Tax is charged at 20% will rise by €1,500 to €36,800 for individuals, and by €1,500 to €45,800 for married couples/civil partners, with one earner.

The Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit will each increase by €50 to €1,700 from the tax year 2022 onwards.

PAYE workers are not ordinarily obliged to file tax returns and may assume they are receiving the correct net pay. But Burke Accountants recommend that PAYE workers review their tax credits and ensure they are availing of all available reliefs such as the 20% tax credit on medical expenses.

Burke Accountants furthermore urge all homeowners ensure their Local Property Tax (LPT) obligations are up-to-date. Revenue can impose a 10% surcharge on related Income Tax, Corporation Tax and Capital Gains tax charges if not done in time.

The past 18 months have been tricky for many businesses. While Government Supports were welcome, and represented a necessary safety net for a multitude, Burke Accountants say suggest it prudent for businesses to begin planning now for their withdrawal.

Along with retaining the reduced 9% VAT rate for the tourism and hospitality sector until August 31, 2022, a Debt Warehousing Scheme has been introduced, whereby tax liabilities can be deferred to assist businesses experiencing cash-flow difficulties due to the Pandemic. Any businesses availing of this scheme should ensure to file all tax returns on a timely basis as any warehoused debts outstanding at January 1, 2023, will incur a 3% interest charge.

“The Government also introduced tax relief for the costs of remote working. If you are a remote worker, your employer may pay you up to €3.20 per day without deducting PAYE, PRSI or USC.

Finally Burke Accountants note that employers must deregister for the Employment Wage Subsidy Scheme if no longer eligible. However, if an employer becomes eligible again they can re-register prior to the first pay date for which the subsidy is claimed.

The EWSS Scheme is currently scheduled to remain in place until April 30, 2022.

“This is vitally important as it is not possible to backdate the claim to include the period of deregistration as that correctly reflected the employer’s expectation at that time,” says Burke Accountants, who remind meanwhile that the reduced rate of Employers’ PRSI will cease on February 28, 2022.