Government backdating new income levy rates to start of year

Rented Mule

THE GOVERNMENT is backdating the new, higher income levy rates to the start of 2009, despite earlier indications that the rates would only come into force on May 1st.

Anyone who received a lump sum payment in the first four months of the year – such as a bonuses, which are traditionally paid in the first quarter or dividends – may be affected by the move.

It will also catch business owners and other company directors, many of whom were urged by their tax advisers to “front load” their 2009 income ahead of the emergency Budget to avoid the higher levies, which had been widely leaked ahead of Budget day.



Absolutely amazing. These people should be dragged through the streets and hung up by their toes.

connundrum

Rented Mule wrote: »

Absolutely amazing. These people should be dragged through the streets and hung up by their toes.

Wait now, the government or the higher earners?

WindSock

Link?

Rented Mule

connundrum wrote: »

Wait now, the government or the higher earners?

The morbidly obese members of Dáil Éireann.

MagicMarker

WindSock wrote: »

Link?

lol, it's funny because it's true.

Caoimhín

Shouldn't the now, state owned banks then apply the interest rate drops retrospectively to the beginning of the year?

Noopti

I think this was something that started with The Right Hook on Newstalk yesterday evening.
Someone text the show saying they were under the impression it would be backdated. Surely not? But then Ruairi Quinn said on the show that under some recent law change they could backdate it if they decided to do that and we won't know until the finance bill is published.

Either way, I don't think it has been confirmed at all, but it is a possibility. If they do.....then they are even bigger w@nkers then we thought.

monkeyfudge

Homer: Uh, Milhouse saw the elephant twice and rode him once, right?

Mrs. Van Houten: Yes, but we paid you $4.

Homer: Well, that was under our old price structure. Under our new price structure, your bill comes to a total of $700. Now, you've already paid me $4, so that's just $696 more that you owe me.

cassette50

"However, people on PAYE whose income is spread evenly throughout the year will not face any clawback."

I take it this means that the ordinary Joe Soap will not be subject to this measure.

ixoy

cassette50 wrote: »

"However, people on PAYE whose income is spread evenly throughout the year will not face any clawback."

I take it this means that the ordinary Joe Soap will not be subject to this measure.

Yep. My understanding is the clawback thing is something built in to catch those who adjusted their wage prior to the budget in the hope of avoiding new levies.

Rented Mule

cassette50 wrote: »

"However, people on PAYE whose income is spread evenly throughout the year will not face any clawback."

I take it this means that the ordinary Joe Soap will not be subject to this measure.

I am on PAYE and it means that my modest 'relocation package' and 'quarterly bonus' will be affected.

Princess Consuela Bananahammock

ixoy wrote: »

Yep. My understanding is the clawback thing is something built in to catch those who adjusted their wage prior to the budget in the hope of avoiding new levies.

So... how come this kinda thing evades protest, whereby lower income families are and public service workers are told "**** off and just be thankful you have a job, you whinging moron" whenever they make their greievienaces known?

connundrum

Noopti wrote: »

Either way, I don't think it has been confirmed at all, but it is a possibility. If they do.....then they are even bigger w@nkers then we thought.

THE GOVERNMENT is backdating the new, higher income levy rates to the start of 2009, despite earlier indications that the rates would only come into force on May 1st.

Anyone who received a lump sum payment in the first four months of the year – such as a bonuses, which are traditionally paid in the first quarter or dividends – may be affected by the move.

It will also catch business owners and other company directors, many of whom were urged by their tax advisers to “front load” their 2009 income ahead of the emergency Budget to avoid the higher levies, which had been widely leaked ahead of Budget day.

However, people on PAYE whose income is spread evenly throughout the year will not face any clawback.

Among those affected may be people who took redundancy in the first four months of the year. Figures from the Department of Enterprise, Trade and Employment state that almost 21,000 people had been made redundant in the first quarter of 2009. That figure is likely to exceed 27,000 by the end of April.

While statutory redundancy payments are not subject to the income levy, as are certain ex gratia payments, many of those taking voluntary redundancy pay the levy on part of their lump sum. They will now be paying more than the 1 per cent levy they initially assumed to be their maximum exposure under the levy.

In his Budget speech, Minister for Finance Brian Lenihan gave no indication that the income levy would be backdated, stating specifically that “all of these measures [on income tax, the health levy and PRSI] will take effect from 1st May, 2009”.

However, the financial resolution passed through the Dáil on Budget day implementing the amended income levy made provision for a “composite blended” rate over the whole of 2009, which has the effect of catching any exceptional payments made before May 1st.

Under the old system, a person earning less than €100,100 paid the income levy at 1 per cent. Although the rate jumped to 2 per cent on income up to€75,036 and 4 per cent above that in the emergency Budget, it was assumed all income taken before Budget day would certainly come under the old regime. Now it appears they will pay extra tax – 1.67 per cent on the first €75,036 and 3 per cent on the balance.

An explanatory note on the Revenue website confirms that self-employed people will be charged the composite rates.

In a note to clients yesterday, KPMG partner John Bradley said: “Individuals who received income such as bonuses or dividends in the first four months of 2009 would have expected the income to be liable to the levies at the old rates. However, the income will be liable to the levies at new composite rates.”

Mr Bradley, who heads KPMG’s international executive services unit, said a lot of people in a position to manage their affairs, such as business owners, were advised to draw down as much of their 2009 income before the Budget for tax planning purposes. He raised the prospect that a similar backdating exercise may also take place with the health levies.

Irish Times

Dan Boyle was on Newstalk this morning saying it was a done deal so I guess thats it.

DrumSteve

oh teh blood is gunna be spilt over this.

Gumbo

seemly its only a deterrant to stop company directors taking large sums of money out before the may 1st D-day!

http://boards.ie/vbulletin/showthread.php?t=2055537876

jon1981

DrumSteve wrote: »

oh teh blood is gunna be spilt over this.

no there won't...we will just bend over and take it like we have been doing all this time ...

ibarelycare

This is a real kick in the teeth for small businesses, self-employed people etc, especially those in the construction side of things whose work will get slacker as the year goes on. :mad:

DrumSteve

jon1981 wrote: »

no there won't...we will just bend over and take it like we have been doing all this time ...

lol then the only place blood is gonna be spilt from is our asses as the government continually gang rapes us like old school styleeeee

ParkRunner

DrumSteve wrote: »

oh teh blood is gunna be spilt over this.

This should affect the wealthier in society a lot more than the average worker from what I can see. It would be interesting to see people out protesting because their bonuses are being taxed, they would want to be fairly brave the way things are now.

junior_apollo

Absolute joke so 'tis...

Those who got bonuses had them destroyed by tax as it was (dont get me started on the fact that i dont think bonuses should be taxed at all... we worked hard to earn a bonus.. what did the government do to earn their extra?)

About half your bonus goes to tax.. and now they want to take more of it..

What about people who got their bonus and spent it on something for their families or holidays or anything really... they are gonna be taxing these people on something they no longer have.. so next months wage = SFA!!!

Absolute joke this country...

Agamemnon

junior_apollo wrote: »

Absolute joke so 'tis...

Those who got bonuses had them destroyed by tax as it was (dont get me started on the fact that i dont think bonuses should be taxed at all... we worked hard to earn a bonus.. what did the government do to earn their extra?)

About half your bonus goes to tax.. and now they want to take more of it..

What about people who got their bonus and spent it on something for their families or holidays or anything really... they are gonna be taxing these people on something they no longer have.. so next months wage = SFA!!!

Absolute joke this country...

It's a farce all right - most people who got bonuses are working for successful companies. These companies are run by grown-ups with brains in their skulls, people who know how to generate, spend and invest money, as opposed to the fucking incompetent cretins running the country. This move is effectively punishing successful private companies, taking more of their money and using it to fill some of the countless holes in our appallingly-run public finances.

My bonus is already gone: I used it to pay off my credit card. My job is safe enough but I'm paying off my debts just in case things change. If only the government had heard of this concept...