Getting the right tax advice for 2020

By Kane Bergin

The new year is nearly here. 2020 will bring more changes to tax rates, rules and regulations. These will affect everyone from single employee’s to large corporations and it’s vital you get the right tax advice for 2020.

When the budget was announced last October, it was obvious that Brexit and Climate Change were both significant factors that had an effect on the direction of tax policies, and they will probably continue to for the foreseeable future.

When delivering his budget speech, the minister pointed out that Ireland’s low corporation tax rate has worked well and that it will remain at 12.5%, which is one of the lowest in Europe and has attracted many large businesses to our shores. Other things did change. Some were good and some not so good. Getting professional tax advice in 2020 will be the best way to see if any of them directly affect you.

Research and Development (R&D) Credit

For 2020, there is an increase in the R&D tax credit from 25% to 30% for small and micro companies. There was also a provision announced that will allow qualifying companies to claim credit in respect to pre-trading R&D expenditure, so it can be offset against VAT and payroll taxes. There will be amendments to the method for calculating the refundable credit amount and the limit on outsourcing to third level institutes of education for all companies claiming R&D credit will be increased from 5% to 15%.

If your company wants to claim the research and development credit, you need to get the right tax advice to ensure you get the full amount your business is entitled to.

Personal taxation

Although there were no changes to the personal tax rates, other things were done to help the general public. Prescription charges were cut by 50% and free medical care for children under 8 was introduced, as well as free dental care for children under 6.

Where personal taxation is concerned, Ireland has the 10th highest rate in the world for top rate taxpayers. At 48%, it’s not as bad as it sounds when you compare it to the highest rate in the world, which is in a small Caribbean country known as Aruba. The top rate of tax in Aruba is a staggering 58.95%, a reduction down from 60%. Even in other European countries such as Sweden, Denmark and the Netherlands, the top rate of tax is over 50%.

It can be very simple to find yourself in the higher tax bracket, but there are legal ways of keeping your liabilities down. You just need the best tax advice to be able to achieve this.

Do you need tax advice about dividend withholding tax?

The 2020 budget introduced a reform to the existing dividend withholding tax (DWT) regime. The rate of DWT will increase to 25% and if that results in an overpayment of tax, it can be reclaimed through the taxpayer’s tax return. It’s possible the higher amount being withheld could result in a material increase in tax for investors.

It was also announced that from January 2021 there will be further changes that will utilise the collection of real-time data through the recently introduced PAYE modernisation system. Revenue have been holding public consultations about the best way to move forward with this proposal.

Limited companies and dividends involve very complex accounting, and you should be seeking tax advice to guide you in the right direction to minimise your tax liabilities for 2020.

Getting the best tax advice whatever your situation

It doesn’t matter if you’re a sole trader, a partnership or a limited company, having the best tax advice can be vital to the success of your venture. There’s lots of information available online to help you, but everyone’s circumstances are different, and you need tax advice for 2020 that is tailored to you.

At Kane Bergin and Company, we offer a huge selection of tax consultancy services and have experience successfully guiding our clients, which is why hundreds of businesses of all sizes put their trust in us.

Any business owner will tell you there is much more to being successful than just making sales. There is bookkeeping to contend with, payroll to run, VAT returns to be completed and tax returns to be submitted. Each of these items come with their own set of rules and regulations and getting them wrong could cost you far more in fines and penalties than getting professional help. Many of these rules can change every year and unless you use a professional service it’s very easy to fall foul of the law.

Having the right financial advice can lead to better decisions about the future of your company, and this includes the tax advice you need to keep your liabilities as low as possible, freeing up money to reinvest in your business or to secure your financial future.

A full-service company

If you need company secretarial services, someone to run your payroll or maintain your bookkeeping, get in touch with us for a free consultation. We can also arrange management accounts on a regular basis, which can be much more informative than waiting until the year end to see how you are progressing. We can help you with financial controls and audit your accounts if needed. In fact, we offer so many services you may be surprised how much easier we can make life for you, and all you need to do is ask. Let us do what we are good at and take the burden of these things from your shoulders. Then you can concentrate on what you are good at – running your business.

You can call us on 01 969 6306, or email us at info@kanebergin.ie to find out more about how we could help you. We will not charge you to have an informal chat, which will let us both gauge if we’re a good fit for each other. Pick up the phone or email us today and get the best tax advice for 2020.