Your step-by-step guide to Pay and File for 2018
The end of October can be a scary time - due to Halloween and the annual scramble to file self-assessed tax returns. Here, Deloitte's Colin Forbes, tax partner, Global Employer Services, and Catherine O'Neill, tax senior manager, Global Employer Services, take the pain out of the procedure
In the blink of an eye the income tax filing deadline is almost upon us again. Preparing and filing your annual self-assessed tax return can be a daunting task for any taxpayer. Year after year the Form 11 self-assessed tax return grows longer and more complex. The Form 11 for 2017 is now even more arduous being 42 pages long with 15 panels and over 900 data points for the anxious taxpayer to complete or wonder if they need to be completed.
Fear not, our step-by-step guide to completing the Form 11 will make the task easier and may even help you to save some tax along the way.
Due to the length of the Form 11, unfortunately not every line of the Form 11 is covered in our guide. We have instead focused on the main areas that taxpayers have difficulty understanding, highlighting the various tax reliefs/exemptions that you may be entitled to and highlighting the main differences to watch out for in this year's Form 11. As always, if you have invested in complex instruments such as foreign life insurance policies or wish to claim property based incentives, you should engage with a professional tax adviser.
Paper or Online?
The 2017 self-assessment Pay and File deadline is 31st October 2018, just over a week away. The paper version of the Form 11 can be found on www.revenue.ie.
Top tip: If you are running out of time to get your tax affairs in order before this date, you could "pay and file" through the Revenue Commissioners' ROS (Revenue Online Service). The deadline is extended until 14th November 2018 if you choose this facility. It is important to note that this extended deadline is only available where you are paying and filing online.
As an added incentive, ROS calculates the taxes due for you as opposed to you crunching the numbers on the paper version. The following must be completed online on or before this deadline:
- File the Form 11,
- Pay any balance of income tax for 2017,
- Pay your Preliminary Income Tax for 2018.
So if you need to avail of the extended deadline and have not previously registered for ROS services, then you need to act quickly as the whole registration process will take a few days to be processed
How do I register for ROS services?
In order to register for ROS, click on the Register for ROS link on the Revenue Commissioners home page - www.revenue.ie - and follow the below steps:
1 Apply for your ROS Access Number (RAN) Once applied for, your RAN will be sent out by post to your chosen address. You should allow two to three working days for it to issue.
2 Apply for your Digital Certificate You can only complete this step when you have received your RAN by post. Enter the RAN number and complete all relevant sections. A ROS System password will be posted to your chosen address - again you should allow two to three working days for this to issue.
3 Retrieve your Digital Certificate and view your account. Using your ROS System password you can retrieve and download your ROS Digital Certificate. You should name the certificate and allocate a password to the Digital Certificate.
Once you have retrieved your ROS Digital Certificate you can access ROS to file your return, pay your tax and view your account.
If this is your first time filing a self-assessment Form 11 tax return, you will need to make sure you are registered for Income Taxes by following the e-Registration process on the ROS website or by completing the Form TR1 which can be found on www.revenue.ie.
How can I pay my tax liability using the ROS services?
The Revenue Commissioners accept the following methods of payment from you:
1 Ros Debit instruction (RDI): You will only need to do this once and it will allow you to submit a payment immediately. The amount of the payment and when the payment is made will be determined solely by you
2 Credit card: Payments using your credit card are limited to card providers Visa and Mastercard. The 1.1pc charge previously in existence for this method of payment was abolished by Revenue in April this year.
3 Debit card: Currently the Revenue Commissioners absorb the charge for using your debit card, however, this may change in the future.
Top tip: Always remember to have funds in the bank account you are using to pay your tax liabilities and that it is a current account in the Single European Payments Area (SEPA), not a deposit account.
What is preliminary tax for 2018?
It is essentially a payment-on-account of your 2018 tax liability. If you are a self-assessed taxpayer, the amount of preliminary tax you must pay for 2018 must be equal to or exceed the lower of:
- 90pc of your final liability for 2018, or
- 100pc of your final liability for 2017, or
- 105pc of your final liability for 2016 (only available where preliminary tax is paid by direct debit and does not apply where the tax payable for 2016 year was nil)
What if I miss these deadlines?
If you do not meet the Pay and File requirements, interest and penalties will be imposed by the Revenue Commissioners.
The good news is that the earlier you file the return after the deadline, the lesser the interest and penalties.
If the 2017 return is filed by 31 December 2018, the surcharge penalty is 5pc of your income tax liability for the year, subject to a maximum amount of €12,695.
If the return is filed after 31 December 2018, the surcharge penalty is 10pc of your tax liability, subject to a maximum amount of €63,485.
Remember though that the surcharge liability is calculated without a credit for preliminary tax paid on account.
Also, in calculating the surcharge, a credit is allowed for PAYE tax deducted at source unless the chargeable person or their spouse/civil partner is a company director.
When filing online, after the filing deadline has passed, ROS will automatically calculate and apply the relevant surcharge.
You can appeal for the late submission surcharge to be reversed, for example in a case where there was a major failure in a computer system or a serious illness.
The interest rate on overdue tax in respect of income tax and capital gains tax is currently 0.0219pc per day and this may be backdated to 31 October in the previous year.
Does non-payment of my Local Property Tax have an impact on my tax return?
If you file your Form 11 on time, but at the date of filing, you have failed to;
Submit your LPT return (for most LPT taxpayers this should have been submitted in May 2013), or
Pay all outstanding LPT liabilities (including the 2018 liability which was due for payment earlier this year), or
Enter into an agreed payment arrangement,
A LPT surcharge of 10pc will be added to your final tax liability for 2017. Where the LPT is subsequently brought up to date, the amount of the surcharge will be capped at the amount of the LPT liability involved.
Top tip: As you can see, it can prove quite costly if your LPT obligations have not been met, so ensure you get your LPT affairs up to date.
I made a mistake on my tax return, how do I fix it?
If you made a mistake on your tax return and the Revenue Commissioners discover the error during an audit, they can impose penalties even if you try to explain to the Revenue Commissioners that you were unaware of the relevant tax laws. The Revenue Commissioners will classify the mistake as careless behaviour and the level of penalty that would apply will depend on whether the mistake has significant tax consequences.
The penalties could be reduced if you "go on the front foot", notify the Revenue Commissioners of the errors and fully cooperate with them to work out the additional tax due.
You should always consult a professional tax adviser to help you with any complex tax matters.
Could I be audited?
Self-assessment Returns are subject to audit by the Revenue Commissioners.
Tax law provides that the Revenue Commissioners may make any inquiries or take such actions as are considered necessary to verify the accuracy of a Return.
Tax law provides for both civil penalties e.g. (publication in a list of tax defaulters) and criminal sanctions for;
Failure to make a return,
Making of a false return,
Facilitating the making of a false return, or,
Claiming tax credits, allowances or reliefs which are not due.
In the event of a criminal prosecution, a person convicted on indictment of an offence may be liable to a fine not exceeding €126,970 and/or to a fine of up to double the difference between the declared tax due and the tax ultimately found to be due and/or to imprisonment.
Top tip: You should retain all the paperwork and electronic records relating to your 2017 tax return for six years.
I'm a PAYE worker and have received for the first time some small amounts of non-PAYE income and I want to claim some tax reliefs - do I really need to complete the Form 11?
If you had a PAYE source of income and your net assessable non-PAYE income was less than €5,000 in 2017, and this income was coded against your PAYE tax credits or fully taxed at source, you are not regarded as a self-assessed taxpayer (known as a chargeable person) for 2017 (provided your gross non-PAYE income before expenses does not exceed €30,000).
This means that you would not need to complete the Form 11. You should instead file the shorter Form 12 (half the length of the Form 11) which allows you to report your income and claim tax credits, allowances and reliefs for 2017.
If you are a company director, owning more than 15pc of the shareholding in a company you are required to file a Form 11 each year even if all your income is PAYE income.
You can fill out a paper Form 12 which can be found at www.revenue.ie.
Alternatively, you can complete the eForm12 - this electronic form is available through the Revenue Commissioners myAccount service as it is much easier to complete than the paper version. The eForm 12 does not provide for returning Capital Gains Tax details. You must fill out a separate Capital Gains Tax return called the Form CG1 in this case which is also available on www.revenue.ie.
Form 11 — Panel A
Personal Details – Pages 3 & 4
THIS is one of the most important panels on Form 11 as it is where you enter your personal details, such as civil status and residence status.
In this section, it has become mandatory for taxpayers to include the PPSN, first name, date of birth, date of marriage and the gender of their spouse/civil partner if they are filing a joint tax return.
You should enter your civil status for 2017 at line 2. If your status has changed during the year you must report this at line 3.
Top tip: I got married/entered a civil partnership in 2017; do we get any extra tax relief?
Maybe. Individuals who were married or became civil partners during 2017 may be entitled to a year of marriage relief. It is important to note though that in the year of marriage or civil partnership you are still taxed as single people and must file separate returns. The good news is that if you paid more tax individually in that year than you would have if you were taxed as a couple you can claim a refund of the difference on the Form 11. If you are due a refund, it will only be from the date of marriage or registration of civil partnership. The amount that you will receive will be paid in proportion to the number of months that you were married or in a civil partnership. Refunds are normally only due where a couple are taxed at different rates and one spouse/partner could benefit from the unused standard rate cut-off point or for some of the unused tax credits of the other spouse.
If you are claiming a year of marriage relief, you will also have to complete line 532 on page 27 and your spouse or civil partner will also have to complete the same section on their own Form 11.
Married Couples & Civil Partnerships, Page 3, Line 4
What’s my basis of assessment if I’m married/in a civil partnership?
For the years following your marriage, there are three options for taxation. The three options are listed at line 4:
- Joint assessment;
- Separate assessment;
- Single treatment.
If you are a married couple or in a civil partnership who are filing jointly, the assessable spouse is obliged to submit only one Form 11 showing the income of both spouses/civil partners unless you have already made a formal election to the Revenue Commissioners to have your tax affairs dealt with under “Separate Assessment” or “Single Treatment”.
The terminology here can be confusing so let’s explain the differences between the two.
Under Separate Assessment and Single Treatment, the spouse/civil partner must file separate tax returns.
Under Single Treatment, each spouse/civil partner is treated as a single person with no right to transfer tax credits or standard rate cut-off points to the other spouse/civil partner. However, under Separate Assessment, most tax credits that are unused, and the standard rate cut-off point up to €42,800 in 2017, can be transferred to the other spouse/civil partner but only at the end of the tax year when the Form 11 is filed. The increase in the standard rate tax band of up to €24,800 in 2017 is not transferable between spouses/civil partners.
Residence status, Lines 14 to 18
This section of the Form 11 may be of interest to readers who have moved here from abroad.
In general, individuals who are resident in Ireland, have lived all their lives in Ireland and are from Ireland are taxable on their world-wide income. In previous Form 11s this position was assumed to be the case unless you ticked the boxes to the contrary.
The format of the questions on residence and domicile has changed in the 2017 Form 11, with each individual now required to confirm that they are either:
- Resident or non-resident;
- Ordinarily resident or non-ordinarily resident;
- Domiciled in Ireland or not domiciled in Ireland.
An individual’s residence and domicile status determines the extent of his/her liability to Irish tax and therefore you should be very careful when completing this section.
You will be regarded as resident in Ireland in the year 2017 if you spent:
183 days or more in Ireland, for any purpose, in 2017, or
280 days or more in Ireland, combining the number of days spent in Ireland in 2017 and 2016. However, this test will not apply to make you resident if you spent 30 days or less in Ireland in 2017.
Caution: A day is one on which you are present in Ireland at any time during the day. So, for example, an early morning flight to London must still be counted as a day here.
Aggregation relief is dealt with in line 18 on the 2017 Form 11. This relief may be available in cases where all the income of a taxpayer and their spouse/civil partner is not chargeable to tax in Ireland because one or both parties are non-resident and therefore separate assessment applies. However, if you wish to claim this relief a submission should be made to the Revenue Commissioners providing both the tax payer and spouse’s total income for the year.
The Remittance Basis of
Taxation, Line 14
I came to live in Ireland from abroad a few years ago; do I have any special tax status in Ireland if I have non-Irish income?
Top tip: If you are not originally from Ireland (ie you are not domiciled* in Ireland) but you are resident here you should ensure that you tick the appropriate boxes at line 14 as you are entitled to a potentially favourable tax regime called the remittance basis of taxation.
* Domicile is a complex legal concept. It may, broadly, be interpreted as meaning permanent home in a particular country with the intention of residing permanently in that country. An individual acquires a domicile of origin on their birth. Whilst each individual has a domicile, that domicile may or may not be the country in which he or she is tax resident.
This means that certain types of foreign-sourced income are liable to income tax here only if remitted to Ireland. For example, let’s say you received dividends from a non-Irish company in 2017, then the dividends would only be taxable in Ireland to the extent they were remitted (eg a bank wire transfer) to Ireland in 2017.
However, it is important to note that this basis of taxation does not apply to foreign employment income to the extent it is attributable to your work duties performed in Ireland. Such income is taxable in full under the PAYE system, whether or not remitted.
Income from Trades (including farming and partnerships), Professions or Vocations — Pages 5 to 8
If you are self-employed you must report your self-employed income in Panel B.
This section has become slightly more user-friendly this year in that the descriptions and the boxes are contained on the same page.
However, if you or your spouse has more than one trade, profession or vocation you need to indicate that on page 5 of the Form 11 and report the additional one on appendix 1 on pages 37-40. If you have more than two trades you are required to tick the box to reflect that on page 37 and complete an appendix 1 for each additional trade, profession or vocation.
Generally, you are assessable on your tax adjusted net profit for a 12-month accounting period ending in 2017, eg if your accounts are normally prepared for the year ending on September 30, then the assessable profits to be reported on the 2017 Form 11 will be those for the year ended 30 September 2017.
If you are a partner, you do not need to complete the Extracts from Accounts section in your Form 11 as the partnership files this information in the Partnership Tax Return, the Form 1 (Firms). You should enter the relevant partnership tax reference number at line 126.
Separate sub panels 119 and 120 have been created for questions specific to farmers. Where possible scheme payments from the
Department of Agriculture, Food and Marine will be pre populated into the ROS version of the Form 11.
There are complex rules regarding the calculation of profits and losses where you have commenced or ceased a trade during the tax year — you should seek professional tax advice in this regard.
Extracts from Accounts
The main part of Panel B is the Extracts from Accounts section (lines 123 to 159). You are not required to attach your financial statements or income and expenditure accounts to the Form 11. However, you should prepare them and retain them for six years as they may be requested by the Revenue Commissioners at a later date.
If the Revenue Commissioners are not satisfied with the Extract from Accounts section, they will return the Form 11 to you to correct the errors and you may be levied with a late filing surcharge so it is vital that you give this section of the Form 11 due care and attention. As the Extract from Accounts section is quite detailed and complex, the Revenue Commissioners will allow innocent errors but this does increase your chance of a Revenue audit.
Top tip: Losses & Capital Allowances
You can use unused trading losses from a prior year against profits of the same trade in the current (2017) accounting period.
You can also elect to use any trading loss incurred in the current (2017) accounting period against other income in 2017 and you can enter this at line 116.
There are various different types of capital allowances that can be claimed for capital expenditure on certain types of business assets and premises. The rate at which the capital allowances can be claimed depends on when the expenditure was incurred or when the building was constructed.
The capital allowances are deducted from your profit figure before you are taxed on it and any unused capital allowances can be carried forward against future profits of the same trade.
Irish Rental Income,
Page 9, Lines 201 - 216
I have let out a rental property during 2017; how do I calculate my net rental income?
You must calculate how much tax you owe on the gross rents receivable after deductions for expenses and allowances. A profit or a loss is calculated for each rental source (residential or commercial). The rental income on which you pay tax is the total profits less the total losses.
- Allowable expenses include:
- Local authority rates
- Ground rents
- Insurance premiums
- Maintenance and repairs
- Property fees before you first rent out your property such as management, advertising, legal or accountancy fees
- 80pc of the mortgage interest paid on the property
- Expenses in between renting out the property in certain circumstances
- Capital allowances
Top tip: In order to receive the mortgage interest relief deduction, you must have registered with the Private Residential Tenancies Board for each tenancy during 2017. If there is no change in tenancy the registration needs to be re-registered every four years.
Your mortgage provider should issue you with a mortgage interest certificate at the end of each tax year which confirms the total amount of interest charged in the year.
You can deduct the full cost of repairs and maintenance in 2017 but you must claim back the cost of expenses of a capital nature, eg kitchen appliances, as capital allowances over eight years.
Top tip: Remember that you can offset losses brought forward from prior years against your 2017 net rental income in most circumstances.
What if I have some income from Airbnb lettings, do I have to declare this income?
Yes, income arising from Airbnb (or similar service providers) lettings are taxable. There can be some confusion over how to treat this income and therefore where to report it on the Form 11.
The Revenue Commissioners have stated, earlier this year, that the income from providing accommodation to occasional visitors for short periods is not considered to be rental income, as the visitors use the accommodation as guests, rather than as tenants.
Their view is that this income should be reported as trading income (Panel B) where the taxpayer is trading as an ongoing business (eg, a guesthouse) or other income (Panel F line 412) where the income is occasional in nature. This would mean that rental losses on other properties could not shelter income from this source.
When treated as other income, there is a Revenue practice of allowing a deduction for incidental costs directly associated with the provision of that service.
Examples of such costs would include cleaning fees, the cost of breakfast provided to guests and a reasonable apportionment of utilities bills attributed to the guests.
You should seek advice from a professional tax adviser if you are unsure on how to report this type of income.
The Revenue Commissioners are in the process of writing to homeowners who have used the Airbnb service for lettings in the 2014, 2015 and 2016 years and who have not reported their income previously.
Employment/Pension income subject to PAYE Pages 12 to 16
P60/P45 data - Lines 217-227
You should include your employment income and/or pension details in this section. You will need a copy of your P60 or P45 in order to complete this section as it will have all the information needed.
Your employer’s registration number is required. New for 2017, it will now be necessary to include the employers name also. This should be prepopulated in the ROS version of your Form 11.
You should include your gross pay for PAYE and USC, PAYE deducted and USC deducted in the relevant boxes. You should tick the box to indicate the source of your income, eg employment income, pension, etc.
If you received a refund of tax or USC for 2017, you should include the amount refunded.
If you or your spouse has more than one employment/pension you need to indicate that on page 12 of the Form 11 and report the additional one in appendix 2 on pages 41/42. If you or your spouse has more than four employments/pension you are required to tick the box to reflect that on page 41 and complete another appendix 2.
Top tip: Special Assignee Relief Programme - Line 228
If you have been approved by the Revenue Commissioners for the Special Assignee Relief Programme (SARP) via the Form SARP 1A application process, you must file a Form 11 and you should enter the details of the relief at box 228. This relief applies to employees with base salary of €75,000 or more per annum, who had an employment relationship with their employer company or associated company for at least six months immediately before relocating to Ireland and have been non-resident in Ireland for at least five tax years before relocating here. You must work in Ireland for the employer for at least 12 months. If you qualify for the relief, 30pc of your employment income in excess of €75,000 is exempted from the charge to income tax. USC and PRSI is payable on your full employment income.
Top tip: Allowable deductions incurred in an employment – Line 238
Depending on the nature of your employment you may be entitled to claim expenses against your income. ‘Flat rate’ expenses are approved by the Revenue Commissioners in relation to certain employments/occupations. A full list can be found at www.revenue.ie. If you qualify for employment expenses, you should include the nature of your employment at line 238(a).
Pension Contribution Relief – Line 299
Tax relief for superannuation contributions/AVCs which were not deducted by your employer can be claimed at line 239.
Foreign Earnings Deduction (FED) – Line 240
You may qualify for this relief where you are tax resident in Ireland but spend significant time working in certain specified countries. A tax deduction of up to €35,000 is available where an individual has 30 qualifying days in a relevant state in a 12-month period. The list of relevant states is available on www.revenue.ie. A qualifying day is three consecutive days spent working in any relevant country.
Social Welfare payments – Lines 241-242
Some social welfare payments are taxable; details of any payments you received should be included here with the gross amount received.
Pension Lump sums – Line 243
Where you have received a pension lump sum during the year, it should be included in this section. The maximum lifetime tax-free limit on retirement lump sums is €200,000. The amount in excess of this is taxable.
Share Option Exercises – Line 245
A share option is a right that your employer grants you to acquire shares in your employer. You must complete a Form 11 for every year that you exercise share options. You should have already paid the income tax, USC and PRSI due on an exercise of share options by completing a Form RTSO1 (available on www.revenue.ie) and paid the taxes within 30 days of exercise. You may be charged interest by the Revenue Commissioners if you have not done this yet.
The Revenue Commissioners are likely to match the employer’s annual Form RSS1 filings to your filings in order to ensure that you paid over all taxes due and reported all exercises of share options which took place during the year.
Foreign Income – Page 17 Lines 301 to 324
In general, individuals who are resident in Ireland and are from Ireland are taxable on their worldwide income. Assuming you are such an individual, you should complete the various types of foreign income listed in Panel E.
Foreign dividend income is broken down into Great Britain and Northern Ireland dividends, US dividends, Canadian dividends and other dividends. Remember only the net Great Britain and Northern Ireland dividends should be reported and that any encashment taxes paid on US and Canadian dividends are listed.
Likewise, deposit interest income is sub-divided into UK, EU and non-EU interest and you should report any taxes deducted in the relevant jurisdiction as you may be entitled to double taxation relief.
You may have worked abroad previously and are now in receipt of foreign pension income and this should be reported at line 302.
Where you are resident but not domiciled in Ireland and have ticked this box at line 14 of the Form 11, you are assessable on your Irish source income including income attributable to the performance of the duties of a foreign employment in Ireland and remittances of other foreign income to Ireland, that is, a transfer of foreign income into Ireland, eg by bank wire transfer. If you are such a person, generally you should only report the amounts of foreign income remitted to Ireland in the relevant lines in Panel E (lines 301 to 319).
Foreign Rental Income - Line 315
The gross amount of foreign rental income received and expenses incurred on the rental property are to be included in this section. Capital allowances for the current year and any capital allowances and unused losses from a prior year should also be included here. Remember foreign rental losses may only be offset against foreign rental profits.
Foreign Bank accounts opened in 2017 – Line 320
Where you or your spouse or civil partner opened foreign bank accounts during the year, you are required to provide information in relation to such accounts including the amount of the initial deposit and other details as outlined at line 320.
Foreign Life Policies/Offshore Funds/Other Offshore Products – Lines 321 to 324
If you have invested in any of these policies or products you should seek advice from a professional tax adviser as the reporting obligations on the Form 11 are both complex and onerous.
Exempt Income — Page 21, Lines 413 to 418
This part of the Form 11 is only relevant where you have income which has an exemption from income tax. Even though this income is exempt, you still need to enter the profits, gains, distributions or losses where requested.
Artists’ Exemption [Line 413]
If you are an artist who has produced a work of artistic/cultural merit and the Revenue
Commissioners have approved this, your profits from this work will be exempt from income tax.
The exemption is restricted to the first €50,000. Income in excess of this amount is taxable and should be entered in Panel B of the Form 11.
The exemption only applies to income tax. The exempt portion of your income is liable to both PRSI and USC.
Profit or gains from Woodlands [Line 4144]
If you own woodlands in Ireland which are used commercially, the profits or gains are exempt from income tax and liable to both PRSI and USC.
Top tip: Rent-a-Room Relief Scheme [Line 415]
This can be quite a popular relief as a relatively high number of taxpayers have chosen to let one or more of the rooms in their homes to tenants to help fund their mortgage costs etc.
If you let a room (or rooms) in your home and the total of the gross rents and any sums for food and laundry services in respect of the letting (ignoring all expenses incurred) does not exceed the annual limit for 2017 (€14,000), the profits are treated as nil for income tax, PRSI and USC purposes.
The relief is not due where the relevant sums are received from your child.
The relief does not affect any entitlement you may have to mortgage interest relief or to the capital gains tax exemption on the disposal of your home.
According to a guidance note issued by the Revenue Commissioners, this relief applies to long-term lettings so as the majority of Airbnb lettings are short term, you will not be able to use this exemption if you received income for such short term lettings.
Top tip: Childcare Services [Line 416]
If you are providing Childcare Services in your home, your gross annual income (before expenses) from the provision of these services may be exempt from tax if it does not exceed €15,000 in 2017.
This income is exempt from income tax and USC but a separate charge to PRSI arises.
Where your gross income exceeds €15,000 the net income after expenses is taxable and should be reported in Panel B.
No more than three children may be cared for at any one time and you must have notified the Health Service Executive (HSE), that you provided childcare services in 2017.
Claiming this exemption does not affect your entitlement to mortgage interest relief in respect of, nor capital gains tax relief on gains from the disposal of, your home.
Pension Reliefs – Retirement Annuity Contract “RAC’s” & Personal Retirement Savings Accounts “PRSA’s” – pages 22 and 23 Lines 506 to 510
I’m self-employed, can I claim tax relief for premiums I paid to a Retirement Annuity contract?
Yes, if you are a self-employed individual, a proprietary director or an employee who is not in an occupational pension scheme, you can claim tax relief for RAC premiums. Tax relief for RAC premiums is subject to two main controls.
1 An age-related percentage limit of an individual’s net relevant earnings (see table).
2 An overall upper earnings limit of €115,000 for 2017. This limit applies whether an individual is contributing to a single pension product or to more than one pension product.
Net relevant earnings consist essentially of relevant earnings less deductions which would be made in computing total income for tax purposes. These deductions include losses and capital allowances.
Age % of Net Relevant Earnings
Under 30 years 15%
30 - 39 years 20%
40 - 49 years 25%
50 - 54 years 30%
55 - 59 years 35%
60 and over 40%
Example: If you are aged 46, have earned €45,000 in this period and make an RAC payment of €12,000, the relief due to you is restricted to €45,000 @ 25pc, ie €11,250.
The balance of the payment, which is €750, may be carried forward to the following year(s) and treated as a qualifying premium paid in that year(s).
Relief may be claimed at Line 507 in respect of premiums paid in the period January 1, 2017, to December 31, 2017, or for any premiums paid in an earlier tax year for which relief has not been obtained.
Top tip: Can I make a top-up payment now and get additional tax relief for 2017?
Yes, tax relief can be claimed on your 2017 Form 11 at line 507 (c) for any premium paid between January 1, 2018, and October 31, 2018 (or the extended ROS deadline of November 14, 2018).
PRSAs, which are another type of pension product which can be availed of by self-employed individuals or employees who do not participate in an occupational pension plan, also provide this facility to allocate a premium paid in 2018 before these deadlines to 2017 – see Line 508(e).
You should contact a pension broker or financial adviser for advice on your options.
Claim for tax credits, allowances, reliefs and health expenses — Pages 24 to 28, Lines 515-545
There are 20 tax credits, allowances and reliefs in this section and here are summaries of the most common reliefs that you may be able to claim.
Home Carer Tax Credit — Line 515
The Home Carer tax credit may be due to you if you are jointly assessed and you or your spouse or civil partner, as a Home Carer, provided care for:
A child for whom you are entitled to Social Welfare child benefit.
A person who is permanently incapacitated by reason of mental or physical infirmity and such person normally resides with you for the year, or
A person aged 65 or over.
It’s important to note that a spouse or civil partner cannot be one of the persons cared for under this relief.
The Home Carer tax credit is €1,100 (for 2017) subject to the Home Carer’s income, if any, remaining below an income threshold of €7,200.
Where the income exceeds this threshold the tax credit is reduced by one half of the amount of Home Carer’s income that exceeds €7,200. Accordingly no credit is due if income exceeds €9,400.
Employee Tax Credit – Line 516
If you are in receipt of income subject to PAYE (ie, wages, salary, and occupational pension) you may claim an employee tax credit of up to €1,650.
You may also be entitled to claim it if you are a recipient of Social Welfare payments; Widow, Widower’s or Surviving Civil Partners (Contributory) Pension, Guardian’s Payment (Contributory), State Pension (Transition), State Pension (Contributory), Illness Benefit, Occupational Injury Benefit and Jobseekers Benefit.
If you are proprietary director (i.e. you own 15pc or more of a company) you are not entitled to this credit.
Earned Income Tax Credit – Line 517
The Earned Income tax credit can be claimed by you if you are a self-employed individual or proprietary director who is ineligible for the Employee tax credit. The maximum relief is €950 for 2017. Where an individual has income that qualifies for the Earned Income tax credit and the Employee tax credit, the combined tax credits cannot exceed €1,650.
Tuition Fees – Line 523
If you are paying tuition fees for a student you may be entitled to tax relief at 20pc.
Here’s what qualifies for the relief:
Tuition fees paid to approved colleges for the 2016 academic year commencing on or after 1 August 2017 in respect of approved undergraduate courses of at least two years duration. The maximum limit relief in respect of qualifying fees for the academic year 2017 is €7,000 in respect of each course.
Tuition fees paid for certain training courses in the areas of information technology and foreign languages. The relief applies to fees ranging from €315 to €1,270 per student.
Tuition fees paid in respect of certain postgraduate courses, subject to a maximum relief of €7,000 per course.
The first €3,000 of each claim is disregarded for relief for a full-time student and the first €1,500 for a part-time student. Lists of approved courses in approved colleges are available on www.revenue.ie
The relief is not available in respect of exam fees, administration fees, registration fees, etc. You should note that if you subsequently get some of your fees refunded you need to notify Revenue within 21 days of receiving the refund. If this isn’t done a €3,000 penalty will apply.
Employer paid Medical Insurance – Line 5267
If your employer paid Medical Insurance (including Dental Insurance) premiums on your behalf (or on behalf of your dependents) you will have been subject to payroll taxes on this benefit in kind. You are entitled to claim a relief for 20pc of the gross premium on your 2017 tax return.
There is a limit of €1,000 on the premium that can be claimed by individuals who are 21 years or over. The limit is €500 on the premium that can be claimed for child dependents.
Home Renovation Incentive (HRI) — Line 528
If you have undertaken renovations to your home during 2017 you may be entitled to a tax credit under the Home Renovation Incentive (HRI) scheme. The HRI enables homeowners or landlords to claim tax relief on repairs, renovations or improvement work that is carried out on their main home or rental property by tax-compliant contractors and that is subject to 13.5pc VAT.
You should complete the details of the tax credit due, which you will find on the HRI online claim you will have previously submitted to the Revenue Commissioners, at line 528.
The HRI is paid in the form of a tax credit at 13.5pc of qualifying expenditure, which can be set against your income tax over two years if you are a self-assessed taxpayer. If you are a homeowner or a landlord, you must be up to date with your obligations under the Local Property Tax.
The qualifying work must cost at least €4,405 before VAT at 13.5pc, which comes to a total of €5,000 with VAT included.
You will only get the tax credit in relation to a maximum of €30,000 (before VAT) during the period covered by the HRI. The minimum credit is €595, based on the minimum qualifying expenditure of €4,405. The maximum is €4,050, based on the maximum qualifying expenditure of €30,000.
Fisher tax credit – Lines 529
This is a new credit with came into effect from 1 January 2017. A credit of €1,270 can be claimed where a resident individual spends not less than 80 days at sea actively engaging in sea-fishing.
Health Expenses — Lines 534 to 545
If you have incurred medical expenses during the year you may be able to claim a tax credit of 20pc of the expenses. You do not need to submit a Form Med 1 with the return, just retain it if the Revenue Commissioners ask you for it at a later date.
Also, you do not need to send in the receipts to the Revenue Commissioners with your claim. However, you must keep the receipts for six years in case the Revenue Commissioners selects your return for examination.
Readers need to be careful not to claim medical expenses which have been fully reimbursed by your medical insurance provider. Also, routine dental expenses such as fillings and standard extractions expenses do not qualify for relief. Root canal treatment and crowns are considered non-routine. The expenses relating to elective cosmetic surgery are also not allowed.
If you maintain an individual on a full-time basis in a nursing home, you can also claim relief for the health expenses for that individual.
Panel L and M
Capital Gains Panel L – Page 29 - 31
Gains and losses made on the sale of your chargeable assets during 2017 should also be reported on the Form 11 at Panel L.
Firstly, the sales proceeds you have received should be reported in the boxes describing the type of asset you have sold.
Various reliefs such as retirement relief may be available.
You should report your losses from the sale of chargeable assets in 2017.
This applies even if you do not have any chargeable gains for 2017.
Remember, losses that have been brought forward from prior years can be used to offset gains in 2017.
A change has been made in the capital gains tax section this year.This is to identify chargeable gains and losses of the current year separately. Where a loss arose on a disposal to a connected person, the amount of the loss will have to be provided, together with the name and also the tax reference number of the connected person – line 809.
For 2017 the due date for paying capital gains tax (CGT) has already passed.
For disposals between January 1, 2017 and November 30, 2017 inclusive, CGT was due by December 15, 2017. For disposals between December 1, 2017 and December 31, 2017 inclusive, CGT was due by January 31, 2018.
If you are only paying your CGT due when you file the Form 11 you are likely to be charged interest by the Revenue Commissioners.
Chargeable Assets Acquired in 2017 Panel M6 - page 31
This should include any chargeable assets acquired during 2017 and the amount you paid for the assets.
Self Assessment — Page 34 - 35
Lastly, you must make a self-assessment for 2017 by completing the self-assessment section of the Form 11.
If you do not make this self-assessment you may be needlessly liable to a penalty of €250.
The income tax, USC and PRSI liability is calculated in this panel and you can deduct the preliminary tax you paid for 2017 already.
The capital gains tax liability is also included here.
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