In recent years, the majority home-owners and families have experienced a sharp decline in disposable income combined with increasing household bills. Following the minimal Universal Social Charge and tax cuts in budget 2018, people will have a minute sum of additional spending money, sadly it will only be around €5 extra a week for typical earning household. Below is a list of 10 tips to assist you with saving money throughout 2018.
- Always Track Your Expenses
It is crucial to know where your hard earned money is actually being spent every week or month so you can save money. By tracking your spending you can reduce unnecessary spending, so it may be time to cut back on eating out or nights out.
- Research Government Grants That You Are Eligible To Claim
There are many government funded grants that are readily available to eligible applicants and can save you thousands in expenses, like insulation and new boilers installation for your home.
- Change To A Cheaper Home Insurance Provider
Always compare quotations when your home insurance is up for renewal, it is possible to save up to €400 a year when you shop around.
- Change Gas & Electricity Provider
Average energy consumers, still using “ESB” could easily save around €450 the space of a year, so it is really worth researching the best deals available that suit your financial situation and consumption.
- Switch Broadband and Phone Supplier
There are many cost efficient broadband and phone service suppliers that provide great coverage to their customers in Ireland so it is crucial for you to compare and contrast these providers as you could save anywhere up to €200 a year by making the switch.
- Switch Your Current Account
The majority of financial institutes (banks) imply a charge on your current account. There are still some methods that can be used to cut or prevent these bank charges that could ultimately save you up to €200 per annum on your current account.
- Regulate The Interest Rate On Your Savings Account
You should always keep an eye on the interest rates on your savings to insure you are getting the best rate. If you are not, it is worth considering switching over your savings account if there is a significant difference.
- Don’t Use your bank to Exchange Currency
When you’re considering exchanging a sizeable amount of cash you should seek the services of a currency broker as they provide a superior exchange rate so you can get the most from the transaction. For example if you were planning on exchanging €20,000 you could save around €200 when availing of a better rate.
- Use 0% Interest Credit Cards
If you have difficulty paying off your credit card balance you should avail of interest free credit offers, which can be 0% interest for up to 9 months. By following this practise you are guaranteed to save money in which previously you would certainly lost.
- Avoid high interest loans
If you are on a low income and you are struggling financially, do not commit to a loan with expensive moneylenders as you may have great difficulty in paying it back. A better option is to submit an application “It Makes Sense” loan ” from a Credit Union, which has a relatively low interest rate that is easier to pay back.
Importance of Professionally Created Accounts for Startups
With most startups, it is vital to keep costs under wraps at all times. This is a good theory to live by, but in your quest to keep costs down, don’t look to false economies to do this.
A problem we encounter fairly often is businesses that spend countless hours each year creating and submitting their own accounts. A professionally prepared set of accounts, can be created quickly, with a minimum input from you and will probably end up saving you money. Most of the time, business owners would be better off spending their limited time doing what they do best and leaving the bookkeeping to the professionals.
Reasons to entrust us with your annual accounts include:
- If you need a mortgage in a few years time, you may need to enlist the help of an accountant anyway, as many banks require at least 3 years audited accounts.
- If you are audited by Revenue, your own bookkeeping methods may not meet the standards required.
- Professional Accountants, such as Moloney and McCarthy and Associates, have years of experience of tax law and will make sure you don’t pay any more tax than you are obliged to.
- Tax laws are changing each year. We keep up to date with these changes, so you don’t have to.
- This is what we do every day. We know what to look out for and can more than likely do it faster and better than you.
If you would like to discuss working with Moloney and McCarthy and Associates about your end of year accounts, just call John or Pat on (068) 22455 for a free, no obligations consultation. We would be delighted to speak with you.
Who should consider setting up a company?
- Farmer who is paying significant income tax at 41% (53% with USC and PRSI).
- A farmer who does not need a significant portion of their farm profits for living expenses.
- Has already looked at all other tax deduction options like family wages, partnerships, pensions.
- Has more than 10 years left before they retire
- Plan on expanding their business over the next 10 years and will require borrowings to fund expansion.
- Has substantial net assets to transfer to the company
- Corporation tax rate is 12.5% compared with a 53% marginal rate of tax.
- If the farm business is expanding and you have secured loans inside the company, the loans are paid back much quicker due to only paying 12.5% corporation tax. Loans are repaid from after tax profits.
- There is limited liability in a company. If the business fails your liability is limited to the amount of the net assets of the company.
- You have more flexibility with pension contributions within a limited company. Pension contributions is a common method used to remove excess funds from a company.
- Higher accountancy costs, more paperwork.
- Money retained is not for director’s personal use.
- No income averaging available within a company. This is not a major problem as corporation tax is only 12.5%
- Balance sheet is on public view via the Companies Registration Office.
- Succession planning can be more complicated.
Before you consider forming a company you should sit down with your accountant and go through all the pros and cons. Every farmer is different and you have to look at all the obstacles and weigh up the advantage.
The Universal Social Charge came into effect on the 1st of January 2011. This ia a tax payable on gross income, includind notional pay, after any relief for certain trading losses and capital allowances, but before pension contributions. This replaces the health contribution and income levy.
All individuals are liable to pay the USC if there gross income exceeds €4,004 per annum for 2011 and €10,036 for 2012.
The rates applicable are as follows:
No Medical With Medical
The first €10,036 2% 2%
The next €5,980 4% 4%
The remainder 7% 4%
Also people aged 70 or over pay 4% on income over €16,016 and not at 7%.
What people do not realise is they may have overpaid there USC charge and should contact their accountant to look into it. Especially people that have a medical card should look into the matter. If you have any queries on the above please contact us.
Land and buildings (situated in an EEA state) which is:
- Acquired on or after the 7th December 2011 and up to and including the 31st December 2013.
- Continues in the same ownership for a period of at least seven years from the date the land or buildings were acquired.
There will be no capital gains tax payable on the capital gain in the seven year holding period. The best way to explain this is by an example:
John purchases 50 acres of land on the 1st of May 2012 for €500,000. He sells the land on the 1st of May 2019 for €700,ooo. He makes a profit of €200,000 and pays no capital gains tax. The capital gains tax at the moment is 30%, capital gains tax saving is €200,000 at 30% = €60,000.
Lets assume John held the land for 10 years and sold it at the same price €700,000. The capital gain is €200,000 but his relief this time is €200,000 at 30% x7/10 =€42,000. John pays €18,000 capital gains tax.
Land prices are improving slightly at the moment and house prices may not have bottomed out yet, it maybe a good time to invest and availe of this capital gains tax holiday.