Are software engineers entitled to any expenses in employment allowance?
- Thread starter ClubMan
- Start date
I rang revenue this morning to ask about the expense that Software Engineers/IT/Business Analsyts etc are intitled to and apparently it's nothing. Sorry folks. However I did find out that my tax credits cert is all wrong - I have no tax credits allocated to me this year and I'm on emergency tax - for some reason the information never carried over from '05 !!!
ACCK01 said:
I've been hearing rumours that they have a new system in operation this year for issuing/managing certs and that it is proving a disaster. Last year my cert was issued on Jan 21. Its now Feb 15 and no sign of it so perhaps those rumours aren't so far off the truth. Likewise from above if someone's credits just vanished during the carryover from one year to another. Not good.
D
dollykat
Guest
ClubMan said:
Some of these expenses categories are so non-specific and vague that there is little chance Revenue would attempt to claw back allowances let alone legally prove you are in the wrong.
I am an engineer and revenue agreed to allocate me the schedule E expenses for a Skilled Engineering Worker (185), i.e. there rules state
"Engineering Industry and Electrical Industry
Skilled workers who bear the full cost of own tools and overalls
Semi-skilled workers who bear the full cost of own tools and overalls
All unskilled workers and skilled or semi-skilled workers who
do not bear the full cost of own tools and overalls"
I am a Telecom Engineer, but engineering boundaries are so blurred these days that Revenue (or anyone) would be hard pushed to dispute that my position does not also cover software, electronic and mechanical engineering, probably similar for may "software engineers"
Good Luck
This is a fairly old thread, but I think I can update it with useful info. Last February I sent a letter to my local tax office when I switched from being a contractor to a permy. I included the following paragraph:
I was awarded the flat rate expense credit. The nature of the engineering industry has changed a lot since the legislation was drawn up. There would have been little difference between a software engineer feeding punch card into a box full of valves and someone replacing a valve in said box.
I expressed what I believed to be the case and the revenue commissioners agreed with my argument. My argument is based on the fact that a software tool should be considered the same a wrench. I would love to see that challenged in a court of law
I was awarded the flat rate expense credit. The nature of the engineering industry has changed a lot since the legislation was drawn up. There would have been little difference between a software engineer feeding punch card into a box full of valves and someone replacing a valve in said box.
I expressed what I believed to be the case and the revenue commissioners agreed with my argument. My argument is based on the fact that a software tool should be considered the same a wrench. I would love to see that challenged in a court of law
My argument is based on the fact that a software tool should be considered the same a wrench. I would love to see that challenged in a court of law
Hi,
We write off all computer hardware and software over one year, on the grounds that they are the tools of our trade. Got an audit a few years ago and no problems. They did complain about the high cost of car parking in the IFSC being an expense. We asked them what their own staff did when they do an audit there and they went off with their tails between their legs.
Towger.
The problem with this is that one could probably claim for anything and get it but later on find that one was not actually entitled to it and have to pay it back - i.e. if Revenue do any check at all then I'm sure that it would be cursory at best and they would treat this as a self assessment issue and assume honesty on the part of the taxpayer. Find and dandy except when the taxpayer simply doesn't know what if any allowance applies. Most people probably don't know what, say, an "embedded firmware engineer" or "FPGA IP tools engineer" is in order to know what category of employment they should slot into...
The problem with this is that one could probably claim for anything and get it but later on find that one was not actually entitled to it and have to pay it back - i.e. if Revenue do any check at all then I'm sure that it would be cursory at best and they would treat this as a self assessment issue and assume honesty on the part of the taxpayer. Find and dandy except when the taxpayer simply doesn't know what if any allowance applies. Most people probably don't know what, say, an "embedded firmware engineer" or "FPGA IP tools engineer" is in order to know what category of employment they should slot into...
I agree completely with self assessment and the presumption of honesty. But if you honestly believe you are entitle to a credit then you are entitled to claim it - this obviously means that "chancing an arm" is not sufficient reason to make a claim.
Doing a quick search of the Revenue website I spotted that this document came out of the freedom of information stuff. Completely speculating here but looking at the types of categories that may claim, in the main there seems to be a lot of civil servanty type jobs or jobs that have a close connetion to the civil service.
These credits may have been allowances that were previosuly given only to civil servants (and connected jobs). On the basis of an equitable tax system (& Freedom of Informatio), Revenue allow the same credits to people in similar jobs to the ones that match the civil servicey category. It doesn't cost the RC much because hardly any people know about it.
If I did genuinely think I qualified (which to be honest teaching isn't my main or part time job and therefore don't think I should be entitled to any credit) I would also be sending in a copy of the Tax Briefing in which the expenses were listed together with a job description.
Just by way of update, these allowances seemed to have stemmed from employee groups that are represented by trade unions.
From Revenue website...
FLAT RATE (EMPLOYMENT) EXPENSES
These are expenses that are incurred in the performance of the duties of the employment and are directly related to the 'nature of the employee's employment'. A standard flat rate expenses allowance (deduction) is set for various classes of employee. For example, airline cabin crews are granted flat rate expenses of €64 per annum. See Flat Rate Expenses list. The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually the employees are represented by trade union officials). The agreed deduction is then applied to all employees of the class or group in question.
From Revenue website...
FLAT RATE (EMPLOYMENT) EXPENSES
These are expenses that are incurred in the performance of the duties of the employment and are directly related to the 'nature of the employee's employment'. A standard flat rate expenses allowance (deduction) is set for various classes of employee. For example, airline cabin crews are granted flat rate expenses of €64 per annum. See Flat Rate Expenses list. The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually the employees are represented by trade union officials). The agreed deduction is then applied to all employees of the class or group in question.
May I ask a question here about these flat rate expenses list?
Is the figure next to your occupation the actual tax credit you receive or do you get tax relief on this figure? For example, does an Aer Lingus pilot get a tax credit of €275 (the number in the table) or €55 (275*0.2)?
Secondly, on my latest tax credit certificate, I have a tax credit of €38.20 listed as flat rate expenses, however, my standard rate cut-off point is also increased by flat rate expenses of €191. By my calculations this increase in the SRCOP saves me €40.11 in tax. Therefore, my effective flat rate expenses tax credit is (38.20 + 40.11) is €78.31.
Is this the normal way flat rate expenses are deducted from your tax?
Is the figure next to your occupation the actual tax credit you receive or do you get tax relief on this figure? For example, does an Aer Lingus pilot get a tax credit of €275 (the number in the table) or €55 (275*0.2)?
Secondly, on my latest tax credit certificate, I have a tax credit of €38.20 listed as flat rate expenses, however, my standard rate cut-off point is also increased by flat rate expenses of €191. By my calculations this increase in the SRCOP saves me €40.11 in tax. Therefore, my effective flat rate expenses tax credit is (38.20 + 40.11) is €78.31.
Is this the normal way flat rate expenses are deducted from your tax?
The employment in expenses figures are the amounts on which relief is granted. Relief is at the employee's marginal rate so, for 2007, 20% or 41%. In the example above the relief would be worth €275 @ 41% for a high rate taxpayer or €275 @ 20% for a low rate taxpayer (doubt that there are too many pilots on the low rate though?).
The way you describe the relief as being given on your statement of tax credits is correct if a little confusing (at least it was for me). The increase in the standard rate band and the increased tax credit results in you paying no tax at your marginal rate on the €191 (€191 x 20% = €38.20 and €191 x 21% = €40.11 and €191 x 41% = €78.31 or €38.20 + €40.11). They do it this way to ensure that you only get 41% relief if you actually pay tax at 41%.
Probably not a great explanation but hopefully it helps...
The way you describe the relief as being given on your statement of tax credits is correct if a little confusing (at least it was for me
). The increase in the standard rate band and the increased tax credit results in you paying no tax at your marginal rate on the €191 (€191 x 20% = €38.20 and €191 x 21% = €40.11 and €191 x 41% = €78.31 or €38.20 + €40.11). They do it this way to ensure that you only get 41% relief if you actually pay tax at 41%.Probably not a great explanation but hopefully it helps...
Thanks Clubman, I think I'm beginning to understand it now.
So is the bottom line that pilots, for example, should be saving €112.75 (275*.41) from their tax bill and this €112.75 saving will be made by Revenue allocating them a tax credit and by also increasing their SRCOP?
So is the bottom line that pilots, for example, should be saving €112.75 (275*.41) from their tax bill and this €112.75 saving will be made by Revenue allocating them a tax credit and by also increasing their SRCOP?
Yes. The allowance will be worth €112.75 to a high rate taxpayer and €55 to a low rate taxpayer.
Oh well...Hi all,
I rang the tax office myself and was informed that as a software engineer I was not entitled to expenses. It is only applicable to tjose who buy uniforms and tools.
P