Author Archives: Cormac

1. Background

Revenue, in conjunction with the Department of Social and Family Affairs and the National Employment Rights Authority (as appropriate), will continue to focus on the issue of employed v self-employed across a multiplicity of sectors for the foreseeable future.

The purpose of this article is to set out Revenue’s position as regards the status (employed or self-employed) of individuals described, correctly or otherwise, as ‘locums’ in the fields of medicine, health care and pharmacy.

2. ‘Locums’

The term ‘locum’ (and, in particular, as regards engagements in the fields of medicine, health care and pharmacy) now appears to be a colloquial term used to cover a wide and disparate range of engagements and, perhaps, to describe non-permanent appointments or engagements.

The Health Levy only applied to individuals who had annual income in excess of €26,000. In the case of employees, the heath levy was collected automatically through payroll, when weekly pay was in excess of €500.

Hence individuals who earned more than €500 a week for some weeks of the year, but who overall earned less than €26,000 in that year may be entitled to a refund of the Health Levy paid. This is more likely to arise in cases where an individual leaves his employment during the year and/or receives a pay-cut.

Introduction

As part of the ongoing exchange of information arrangements between the Department of Social Protection (DSP) and Revenue, Revenue has received information from the DSP of long-term pension payment details covering the State pension, the Transition pension (paid to people aged between 65 and 66), Widow’s/Widower’s/Surviving Civil Partner’s and Invalidity pensions.

With recent increases in farming profits, many farmers are facing significantly higher tax bills than before. As a result, some are considering incorporating their farms. Although this option may be advantageous for some farmers, it will not be suitable for everyone and it is important that farmers fully understand the implications before they make any decision.

Incorporation consists of setting up a new company which will be owned by the farmer. This company will then take-over the farming trade, which means that all farming profits will “belong” to the company and hence it will be the company, and not the farmer that has to pay the tax on these profits. It would be normal for the company to pay a salary to the farmer for his services.

As you know, new RCT rules are coming in on1 January 2012. The key features of the new system are as follows:

All communication between the principal contractor and the Revenue will now be online only. There will be no “paper” alternative. So all principals will have to be registered on ROS.

Everytime a principal enters into a new contract with a subcontractor, he must notify the Revenue Commissioner about it and give the relevant details. This is called “contract notification” and must be done online.

The Revenue will then acknowledge the notification and will then advise the principal of what rate of RCT applies to that particular subcontractor

If you are considering transferring your farm to your son or daughter, there are a number of possible tax implications that need to be carefully considered before a decision is made.

Capital Gains Tax (“CGT”)

For CGT purposes you will be treated as if you sold the land for its market value, regardless of what your son or daughter actually pays you for it (if anything).

You will then be subject to CGT at a rate of 25% on the difference between the current market value of the land and its value when you originally acquired it. You are allowed to increase the original cost/value of the land by a certain factor to give some relief for inflation.