"We are the only OECD state where some get back more than they pay in income tax"

[Firefly]

Which is odd, because it is a natural inclination, I would have thought, to minimize your tax bill to the greatest extent as possible. All within the rules of course, but nevertheless tax deductible business costs can tend to be exaggerated somewhat.

Then they would be unlawful and would amount to tax evasion and subject to massive penalties and interest charges.

Just as it would be a natural inclination to maximize welfare assistance, all within the rules of course.

I agree. It's the system that would need to be changed.

Expect maybe for the PAYE worker, who doesn't even get the opportunity to touch their own income before it's whisked away to Revenue and Social Protection - where is the equality of opportunity for PAYE worker's there?

I agree...PAYE workers are a dream for the government.

 

[Duke of Marmalade]

I don't.

I'd buy the guy(s) who broke into my house a pint before I'd sit down with someone who scams their taxes or welfare or makes a false or inflated insurance claim.

If you are doing nixers or grinds and putting the cash in your pocket you have no moral right to criticise burglars or welfare scammers.

Morality is of course subjective. To me one of the inputs is the hurt caused to others. Stealing €10K life savings from an elderly person is worse than stealing €10K from Denis O'Brien is worse than under declaring €10K tax. I note you have a certain affection for the burglar class. That would not be shared by their customers.

 

[Purple]

Morality is of course subjective. To me one of the inputs is the hurt caused to others. Stealing €10K life savings from an elderly person is worse than stealing €10K from Denis O'Brien is worse than under declaring €10K tax. I note you have a certain affection for the burglar class. That would not be shared by their customers.

I've been burgled 4 times, I disturbed them twice. I'm a repeat customer.

 

[jjm]

I agree...PAYE workers are a dream for the government.[/QUOTE]
I see Paschal Donohoe has confirmed plans to merge the USC with PRSI.It will be interesting to see if he applies it to everyone who pay USC at present. There will be a few people upset who got away up to now not having to pay the extra levies paid by PAYE PRSI A1 workers untill end of 2012 when the USC came in. It will be interesting to see will he let some lobby groups who are paying at present and did not in the past get away without paying there fair share,

 

[jjm]

[QUOTE="Purple, ]I've been burgled 4 times, I disturbed them twice. I'm a repeat customer
They must be looking for Workers

 

[TheBigShort]

Then they would be unlawful and would amount to tax evasion and subject to massive penalties and interest charges.

Not necessarily. Revenue often make decisions regarding what is a 'reasonable' amount to deduct as an expense. For instance fixed mobile phone business plans are usually allowed regardless of whether or not the full allowance is used for business use or personal use. Such phones are often used for personal use also. But in practical terms it would be near impossible to decipher which call was business related or personal, so Revenue will allow a 'reasonable' amount. Typically a reasonable fixed payment plan amount. This amount will tend to be exaggerated. All perfectly legal and above board, but exaggerated nonetheless.

 

[Firefly]

Not necessarily. Revenue often make decisions regarding what is a 'reasonable' amount to deduct as an expense. For instance fixed mobile phone business plans are usually allowed regardless of whether or not the full allowance is used for business use or personal use. Such phones are often used for personal use also. But in practical terms it would be near impossible to decipher which call was business related or personal, so Revenue will allow a 'reasonable' amount. Typically a reasonable fixed payment plan amount. This amount will tend to be exaggerated. All perfectly legal and above board, but exaggerated nonetheless.

If the expenses are exaggerated it's illegal. It's up to Revenue to make the call whether or not to pursue the individual.

 

[Purple]

Not necessarily. Revenue often make decisions regarding what is a 'reasonable' amount to deduct as an expense. For instance fixed mobile phone business plans are usually allowed regardless of whether or not the full allowance is used for business use or personal use. Such phones are often used for personal use also. But in practical terms it would be near impossible to decipher which call was business related or personal, so Revenue will allow a 'reasonable' amount. Typically a reasonable fixed payment plan amount. This amount will tend to be exaggerated. All perfectly legal and above board, but exaggerated nonetheless.

The only perks that are not subject to BIK are those enjoyed by Public Servants. For example if my employer give me the unlimited use of a company car worth €30,000 I will be charged BIK unless I do very high verifiable business mileage. On the other hand if my employer give me a parking space in Dublin City Center worth €40,000 I will not be charged any BIK. There are thousands of Public Sector parking spaces provided in Dublin City Center which employees can use 7 days a week. When BIK for parking spaces was mooted it was shot down straight away.

By the way, if the claims cannot be proven then they will not be accepted. The idea that Revenue will just accept an exaggerated claim is nonsense.

 

[TheBigShort]

If the expenses are exaggerated it's illegal. It's up to Revenue to make the call whether or not to pursue the individual.

Not if Revenue accept a 'reasonable' amount for business cost deductions. They are few and far between, admittedly, but fixed price business phones plans are typical of such.
So a sole trader, painter & decorator say, uses a fixed price business plan phones tariff of €60 a month (reasonable), then this amount is a legitimate business expense even if the phones is also used for personal use.
It's perfectly reasonable and practical from every angle.

 

[Firefly]

Not if Revenue accept a 'reasonable' amount for business cost deductions. They are few and far between, admittedly, but fixed price business phones plans are typical of such.
So a sole trader, painter & decorator say, uses a fixed price business plan phones tariff of €60 a month (reasonable), then this amount is a legitimate business expense even if the phones is also used for personal use.
It's perfectly reasonable and practical from every angle.

You might think so, I might think so but it's up to Revenue to make the call. I'm not for a second saying it doesn't happen by the way, just pointing out that the nature of self-assessment is just that - you can claim for anything you like but if Revenue find against it you could lose your shirt.

 

[TheBigShort]

You might think so, I might think so but it's up to Revenue to make the call. I'm not for a second saying it doesn't happen by the way, just pointing out that the nature of self-assessment is just that - you can claim for anything you like but if Revenue find against it you could lose your shirt.

Why would Revenue fight against it if they have agreed to it?
The point is, from a practical point of view, it is wholly reasonable in 2017 for any self-employed person to incur mobile phone costs as a business expense each month. It would be somewhat impractical for Revenue to forensically analysis every call to determine which calls are personal and which are business use and then get tied up arguing the toss over tiny amounts. Hence the application of a 'reasonable' phone plan, which, if it was me, I would deduct as 'reasonable' amount as Revenue would allow, wouldn't you?

 

[TheBigShort]

The only perks that are not subject to BIK are those enjoyed by Public Servants.

Who is talking about BIK?

if my employer give me a parking space in Dublin City Center worth €40,000 I will not be charged any BIK

I'm guessing there is a typo in here or am I missing something?

There are thousands of Public Sector parking spaces provided in Dublin City Center which employees can use 7 days a week

I doubt it, but so what?

When BIK for parking spaces was mooted it was shot down straight away.

How did we get here?

By the way, if the claims cannot be proven then they will not be accepted.

12 monthly phones bills from a licensed mobile operator showing your name and address and the business plan details should suffice.

 

[Firefly]

Why would Revenue fight against it if they have agreed to it?
The point is, from a practical point of view, it is wholly reasonable in 2017 for any self-employed person to incur mobile phone costs as a business expense each month. It would be somewhat impractical for Revenue to forensically analysis every call to determine which calls are personal and which are business use and then get tied up arguing the toss over tiny amounts. Hence the application of a 'reasonable' phone plan, which, if it was me, I would deduct as 'reasonable' amount as Revenue would allow, wouldn't you?

The points you are making are valid, but ultimately it's up to Revenue to decide, not you nor I.

 

[TheBigShort]

The points you are making are valid, but ultimately it's up to Revenue to decide, not you nor I.

That is the point, Revenue DO decide! All legal and above board. Leading to exaggerated business cost claims. I don't blame anyone for taking advantage of it. On an individual basis it probably doesn't amount to much, collectively it would be a tidy sum of lost Revenue.
Similarly if welfare rules say I can claim xyz, albeit I don't need it (think child benefit for wealthiest in the country) why shouldn't I claim it?
Is it any different that a person brought up in a disadvantaged area maximizes their benefits from the welfare system, than a wealthy person pays and accountant to minimises their tax liability?
Once it's all legal and above board, what is the difference?

 

[Purple]

Who is talking about BIK?

I'm guessing there is a typo in here or am I missing something?

I doubt it, but so what?

How did we get here?

You are talking about people getting benefits from work that they are not taxed on. The way in which such a tax is applied is called "benefit in kind". Revenue put a monitory value on such things and people pay tax on it. Your example was a mobile phone. For most people the benefit in cash terms would be under €20 a month.
A parking space in Dublin City Center will cost between €100 and €250 a month to rent and over €40,000 to buy. They are provided free of charge to some people working in Dublin. How come there's no BIK there? The State spends around €10,0000,000 a year renting spaces for State employees in Dublin. Add to that the spaces it owns and provides for free which, if rented out at market prices, would provide a tidy revenue for the State. Why do these large non-cash payments not attract taxation? If it is okay to provide such spaces for work should the employee be charged if they leave their car there and go shopping after work?

12 monthly phones bills from a licensed mobile operator showing your name and address and the business plan details should suffice.

Yes, it does. Is that the best you can do?
I'd think self employed people being allowed to claim a proportion of their utility bills etc would be a better target.

 

[Firefly]

That is the point, Revenue DO decide! All legal and above board.

Revenue aren't the law. I'm not an accountant nor a lawyer, but my belief is that expenses can be deducted if they are "wholly, exclusively and necessarily" related to the businesses. Personal phone calls clearly aren't and claiming for them is technically breaking the law and fraudulent. Whether Revenue decide to pursue it or not is up to Revenue as the system is based on self-assessment. I agree that in most cases it's not practical or cost effective to Revenue do to so, but that's up to Revenue. Who knows in the future with Big Data and AI / Analytics what Revenue may be able to do if they can get people's phone records..

Similarly if welfare rules say I can claim xyz, albeit I don't need it (think child benefit for wealthiest in the country) why shouldn't I claim it?

Because you are entitled to it legally even if you don't need it. Morally it could be argued differently, but legally there isn't a problem. It's up to the Dept of Finance and the government of the day to change this if they wish.

Is it any different that a person brought up in a disadvantaged area maximizes their benefits from the welfare system, than a wealthy person pays and accountant to minimises their tax liability?

When you say "maximizes their benefits from the welfare system" I presume you mean doing so in a legal way and not claiming for something they shouldn't correct? If so then I don't have an issue with someone claiming for something they are entitled. For some reason though, we seem to have an awful lot of "sick" people claiming benefits - I would have expected the HSE to launch an investigation into this on medical grounds at the least....maybe we have an epidemic on our hands!

 

[Leo]

12 monthly phones bills from a licensed mobile operator showing your name and address and the business plan details should suffice.

When my parents ran a small business, they were asked by Revenue for full listings of all calls made along with details of who those calls were to (to prove they were legitimate business calls) before they'd approve what ultimately was very small money.

 

[Firefly]

Why would Revenue fight against it if they have agreed to it?

You would have to ask Revenue that? Why don't they chase money that should be flowing into the government's coffers?

The point is, from a practical point of view, it is wholly reasonable in 2017 for any self-employed person to incur mobile phone costs as a business expense each month. It would be somewhat impractical for Revenue to forensically analysis every call to determine which calls are personal and which are business use and then get tied up arguing the toss over tiny amounts. Hence the application of a 'reasonable' phone plan, which, if it was me, I would deduct as 'reasonable' amount as Revenue would allow, wouldn't you?

Again, that's upto Revenue to decide on a case by case basis if it is worth their while to pursue these expenses.

 

[Firefly]

When my parents ran a small business, they were asked by Revenue for full listings of all calls made along with details of who those calls were to (to prove they were legitimate business calls) before they'd approve what ultimately was very small money.

I'd believe it and see nothing wrong with this.

 

[TheBigShort]

When my parents ran a small business, they were asked by Revenue for full listings of all calls made along with details of who those calls were to (to prove they were legitimate business calls) before they'd approve what ultimately was very small money.

And nothing to stop them doing this still. All depends on your business circumstance, for instance, how much did your parents declare as a phones expense? What was their trade? What was the turnover? Perhaps Revenue suspected the phone bill to be somewhat 'unreasonable', hence the audit trail?

All I know is, in 2017, if you have a fixed phone mobile price plan in place, Revenue will accept it as a business expense as long as it's 'reasonable', regardless if it also used for personal use.