3 Tax Tips for Business Owners, Homeowners and the Self-Employed

Non-Principal Private Residence Charge (NPPR)

The NPPR was an annual charge applied from 2009 to 2013 in respect of residential property that was not the owner’s only or main residence in those years. If you owned residential property on the liability date in any of the years 2009 to 2013, and it was not your only or main residence on that date, you were liable to pay the charge of €200. The first liability date was 31 July 2009. For each year from 2010 to 2013, the liability date was 31 March.

There were some exemptions to the charge, for example, for mobile homes, caravans or granny flats etc. The NPPR charge was €200 for each property that you owned on the liability date each year, apart from your main residence.

From 2014 onwards, the NPPR is no longer charged, but outstanding liabilities and payments will still be collected.

Earlier this year, the High Court decided that the charge could be claimed against tax following a case taken by a landlord. That opened up the possibility that tens of millions of euro being repaid to landlords by the Revenue Commissioners. However, it has now emerged the State is appealing the High Court judgment to the Court of Appeal. I would advise you to speak to your Accountant to make sure you are fully prepared in case the State loses the appeal.

Home Renovation Incentive (HRI)

The Home Renovation Incentive (HRI) scheme 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 13.5% VAT.

The HRI is paid in the form of a tax credit at 13.5% of qualifying expenditure, which can be set against your income tax over 2 years. This effectively reduces the rate of VAT to zero on qualifying work, up to a value of €30,000.

To qualify for the HRI, the work must be done between 25 October 2013 and 31 December 2018 for homeowners; between 15 October 2014 and 31 December 2018 for landlords.

To qualify for the HRI as an owner-occupier, the work must be carried out on your principal private residence.

The type of work that qualifies for the HRI is repair, renovation or improvement work that is subject to VAT at 13.5%. This includes extensions, garages and attic conversions; the supply and fitting of kitchens, bathrooms and built-in wardrobes; fitting of windows; garden landscaping; plumbing, tiling, rewiring, plastering and painting.

The qualifying work must cost at least €4,405 before VAT at 13.5%, 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.

You can claim the HRI tax credit after the end of the tax year if your qualifying expenditure has reached the minimum amount of €4,405 before VAT (a total of €5,000) and you have paid income tax. Any unused tax credit can be rolled over into the following year.

Expenses incurred prior to setting up a business

If you have set up your business, you may be able to claim a tax deduction for certain qualifying expenses incurred in respect of the business in the three years before the commencement.

For tax purposes, these expenses are treated as if they had been incurred at the time that the trade started.

These may include business-related leasing costs, legal fees and the cost of preparing business plans, feasibility studies and training.

All of the above are subject to relevant qualifying conditions.

Gerard O’Brien LL.B LL.M CFP® QFA is a Certified Financial Planner and the Owner of Heritage Wealth Management, a Financial Planning practice based in Main Street, Midleton, Cork. For more information, contact Gerard at gerard@heritagewealth.ie www.heritagewealth.ie

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