11 Sep 2017 | 11.41 am
Interview: Daragh O’Shaughnessy, KSI Faulkner Orr
Increase in returning Irish emigres seeking tax advice
11 Sep 2017 | 11.41 am
Daragh O’Shaughnessy, Lead Tax Consultant with KSI Faulkner Orr, has more than 15 years’ experience in advising clients and delivering lectures on tax topics across a wide range of sectors, with a focus on advising SMEs and individuals on business, investment and succession planning
In your dealings with business clients, what tax planning or tax resolution issues are of most concern to them at the moment? What are their Brexit concerns?
The main difficulty with planning around Brexit at the moment is the uncertainty. It is difficult to plan any business decision in an information vacuum, and this is particularly true with tax planning. However, the Ireland-UK tax treaty is independent of the UK’s membership of the EU and should therefore survive Brexit, so any tax planning for Brexit should be largely based on that treaty.
Interestingly, we are recently seeing a marked increase in the number of people seeking tax advice on how to effectively plan a return to Ireland after living abroad for a few years, or indeed how to plan a move to Ireland for the first time. If planned carefully in advance, there are definite opportunities for tax savings in such a move.
How common is it for businesses to come unstuck on VAT issues?
VAT is a high risk tax both for Revenue and for the trader. Revenue’s responsibility when administering most taxes is focussed on the collection of tax – with VAT, Revenue have a responsibility for assessing and issuing tax refunds in a lot of cases. Revenue also have a huge responsibility to ensure that Irish VAT numbers are issued only to those who are entitled to them, as international VAT fraud is a huge risk to national exchequers across Europe.
To enable Revenue to reduce such risk, they conduct regular VAT audits, and have recently been granted additional powers to potentially hold a trader responsible for the VAT fraud that one of their suppliers may have committed. Even where there is no risk of fraud, every business person should make sure that the VAT on their sales is being treated correctly from a technical point of view – as we have seen recently with the confusion over the changes to the VAT exemption for education and training, very subtle differences between different types of goods and services can mean vastly different VAT treatments.
A business owners five years out from projected retirement – what are the important tax issues to plan for?
The first thing to do is to assess precisely what form your retirement will take. Will you sell the business to a competitor? Will your senior management buy the business from you? Do they have the funds to do so? Do you intend to make a gift of the business to your children? Have you maximised the funding of your company pension? There are tax reliefs and exemptions specifically designed to facilitate the tax-efficient retirement of one generation to make way for another. However, your tax adviser can only advise you on the best approach after you have first advised what your personal and commercial objectives are.