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Address: 82 North Main Street, Bandon, Co. Cork, P72 T971
Tel: (023) 884 1560 | Email: info@odmaccountants.ie

FAQ

Find answers to your accounting and tax queries here


Can I, as a director, claim mileage and diesel expenses on a company car?

You have two main options:

  1. You own the vehicle and pay for all the running costs out of your own pocket – diesel, motor tax, insurance, repairs. At the end of the month, you submit a mileage claim to the company for business mileage using the appropriate kilometre rates. Note that as and from 1 April 2017
  2. The company owns the vehicle and pays for all the running costs – diesel, motor tax, insurance, repairs. The company can claim back VAT on these expenses as appropriate. In this case there is no mileage claim as the company pays for everything. Note that there may be a benefit in kind issue if the vehicle is used for personal use

Medical Expenses Claim

Tax relief for unreimbursed medical expenses incurred on behalf of a taxpayer

You can claim relief on the cost of health expenses. These can be your own health expenses, those of a family member or any individual’s, as long as you paid for them.

You receive tax relief for health expenses at your standard rate of tax, 20%. Nursing home expenses are given at your highest rate of tax, up to 40%.

Medical expenses include

  • GP costs
  • Prescription medicines
  • Hospital care including treatments and scans
  • Physiotherapy
  • Non routine dental and ophthalmic expenses

Don’t forget to include these in your tax return!

Forming a business

Sole trader v Limited Company Considerations

There are two main options open to entrepreneurs when setting up in Ireland

Sole trader or Limited company

We set out below a brief summary of the differences between both and the issues to be considered before making a final decision

Sole Trader

  • Sole trader is the simpler option.
  • To set up as a sole trader, you will need to register as a sole trader with the Revenue Commissioners and submit an annual income tax return once a year (deadline 31 October of the following tax year i.e. the tax return for 2017 tax year is due by 31 October 2018). The books and records are generally easier to maintain and don’t have to be audited.
  • As a result accountancy fees should be lower than for other structures.

Limited Company

  • A limited company is a legal entity separate to yourself and shareholders liabilities are limited to the amount of shares they subscribe for.
  • A limited company and its directors are subject to more regulation than a sole trader but the company structure offers advantages in terms of taxation in that current rate of Corporation tax for Limited Companies is 12.50%.
  • Every year, Financial Statements (accounts) will need to be prepared together with a Corporation Tax return and an Annual Return to the Companies Registration Office. Most small companies don’t need to get their accounts audited as their accounts are under the thresholds for audit.

Some issues to consider when making a decision on legal structure:

  • Will the business make sufficient profits (now or in the future) to justify the additional expense of running a company?
  • Is limited liability important to your business in your industry sector.
  • Is there a good marketing reason to trade through a company rather than as a sole trader?
  • Are you willing to deal with the paperwork associated with the business in a timely manner or will you outsource/delegate this to someone else?
  • Do you want to protect the business name by registering a company?

 

Can I claim tax relief on college fees?

You can claim tax relief on fees (including the student contribution) that you have paid for third level education courses. Please see attached link for further details.

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/education/tuition-fees-paid-for-third-level-education/index.aspx

I have heard about audit exemptions for small companies. What is a “small company” and who can take advantage of these provisions?

To qualify as a small company a company must satisfy TWO or more of the following conditions in the current financial year and in the preceding financial year (unless it is its first financial year)(s.350(2), (3) & (5) Companies Act 2014):

  • Balance sheet total does not exceed €6m
  • Turnover does not exceed €12m
  • Number of employees does not exceed 50

Exemption from filing an auditor’s report (the “audit exemption”)(s.360 CA 2014)
Small Company Audit Exemption
In order for a company to qualify for the small company audit exemption the company must meet the following criteria in respect of the financial year concerned and the preceding year – s.350(3) CA 2014.

The company must qualify as a “small company” (As defined above). The company must not come within any of the 18 classes of companies listed in the Fifth Schedule to the 2014 Act. The company’s annual return, to which Financial Statements are attached, must be filed on time for the year in question and the previous year. (s.363 CA 2014)

Extracts from www.cro.ie

For more detailed information please follow the following link-
https://www.cro.ie/Annual-Return/Financial-Statements-Requirements/Audit-Exemption

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