Shadow Economy What is it? Also known as the Black market! In general, shadow economy activityis, in which businesses and individuals engage in inappropriate practices with the aim of not complying with their legal obligations relating to matters such as PAYE, PRSI, VAT, licenses and employment. It includes - 1.Not declaring, or under-declaring, a source of income so as to avoid tax and other liabilities; 2. Employers paying employees in cash under an 'off the books' arrangement so as to evade PAYE and PRSI liabilities; 3. 'Working and signing' - working or running a business whilst at the same time claiming falsely job-seekers benefit from the Department of Social Protection; 4. Non-operation of the VAT system; Most of the shadow economy activity takes place within that which is referred to as the ‘cash economy’ (i.e. the payment for goods and services by way of cash). While many people don't see the harm of this... it is detrimental to our economy! It reduces the taxes collected by revenue which are in turn used to finance the emergency services, GARDA, FIRE, AMBULANCE and other public services such as hospitals, roads, waste treatment and many more. It also creates an unlevel playing field for businesses which has a knock on effect on competitiveness, sustainability and long term job creation. Wether you work a day, a week, a month or years with an employer as an employee or contractor you should always insist that they process your payments though their books correctly. Everyone benefits in the long term. Like out page and subscribe to be kept up to date with future posts. If you or anyone you know needs help with their book-keeping needs please don't hesitate to contact us on 085 2052600

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Wishing all my clients, family and friends a Happy and healthy christmas and a fabulous New Year!!!!

For the Self-Employed Budget 2017 part 4 of 4 I. The enhanced capital allowances for energy efficient equipment are extended to sole traders as well as companies. J. CGT: 10% CGT rate will apply if you sell your business in 2017 – subject to certain rules. K. Gift/inheritance Tax: The tax free threshold are increased in 2017, the main change was the threshold from parent to child. This increases from €280K to €310K. L. Dental and Optical benefits plus the invalidity pension will be available for self-employed persons from 2017 onwards. This is not to be underestimated. Self-employed people and their children never received dental or optical benefits before. Go and get your teeth cleaned! Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!!!! Lynch Book-keeping Services, Clonmel 085-2052600

For the Self-Employed Budget 2017 part 3 of 4 H. Help to buy incentive: Relief is given in the form of a rebate of an amount equal to income tax paid for previous four years, the maximum allowable will be 5% of the value of the new home up to €400,000. Maximum rebate allowed is €20,000. The relief is available to firs time buyers and self-builders. Relief will be provided at deposit stage or at the first drawdown of a self-build mortgage. The mortgage must be taken out for a minimum 80% of the purchase price, or in the case of a self-build, 80% of the valuation approved by the mortgage provider. There’s a lot of complication with this one, we’d recommend having a chat with a mortgage broker. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!!!! Lynch Book-keeping Services, Clonmel 085-2052600

For the Self-Employed Budget 2017 part 2 of 4 D. The tax exemption for renting a room in your house increases to €14,000 from €12,000 per annum. E. The home renovation incentive is extended to the end of 2018. F. Farmers experiencing difficult trading losses can opt out of income averaging. G. Start your own business relief – tax incentive for the long term unemployed starting their own business is extended for another 2 years. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!!!! Lynch Book-keeping Services, Clonmel 085-2052600

For the Self-Employed - Budget 2017 part 1 of 4 A. The self-employed tax credit increases from €550 to €950 per annum. We’re still not on a par with employees who receive €1650 per year, but we’re getting there. B. Small reductions in the rates of Universal Social Charge, in cash terms it means that a person earning Gross €40,000 per annum will see a €200 reduction in USC. C. Rental Income: 80% of mortgage interest on your rental investment property will be deductible against rental income, this increased from 75% in 2016. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!!!! Lynch Book-keeping Services, Clonmel 085-2052600

VAT Inspection and Record-keeping Revenue may visit certain businesses for VAT inspection. The possible causes are: * The business fails to submit its timely VAT returns. * Revenue receives certain concerning information related to the business. * Revenue feels that certain businesses lie in the category of their risk factor. These businesses under the risk factor don’t indulge in a proper dealing of VAT. If Revenue presumes that your business also poses the same risk, you can expect a VAT inspection from them. * Revenue decides that a business is having an abnormal dealing pattern. It means that the purchase, sales ratio is uncommon on one hand and on the other, there’s an abrupt drop in VAT as declared by the business. * The business has a history of late payment of VAT and defaulter penalties. * Abnormal reclamation of VAT is made by the business. A decent and orderly VAT Record will be immensely beneficial because the same records serve as a proof of your business dealings and may solve any dispute (if any) with Revenue on their VAT inspection. Keeping an orderly VAT record can save a business from a lot of hassle from the point of view of its VAT returns and it also allows the business to keep a tab on its income and expenditure. It’s, therefore, advisable to keep a systematic record of VAT to ensure that the business dealings happen in a legal as well as in a smooth manner. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!! Lynch Book-keeping Services, Clonmel 085-2052600

VAT Invoices in a Nutshell Only businesses that have a valid VAT-registration can issue invoices. The seller should: * issue as well as keep authentic invoices (in paper or in soft copies). * retain copies of each and every sale invoice issues by the seller. Even if the invoice is canceled or is produced by mistake, the seller needs to retain the same invoice for future references. * retain each and every purchase invoice as well. All such records should be kept for a period of 6 past years and the current year. A point to be noted is that VAT can’t be reclaimed with the use of an invalid invoice, preliminary (proforma) invoice, delivery note. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!! Lynch Book-keeping Services, Clonmel 085-2052600

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How the VAT Records should be kept The seller should keep his/her records of VAT for a minimum of 6 years. VAT records can be kept electronically as a part of any software program or on paper as well. These records should be authentic, readable as well as complete. In case a VAT invoice is lost or damaged beyond recognition, you can request the supplier send a duplicate invoice. You should also mark “duplicate” on that specific invoice copy. Please note that Revenue may visit a business for inspection of its VAT records. If the records are not in order, a penalty can be levied on the same business as well. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!! Lynch Book-keeping Services, Clonmel 085-2052600

VAT INVOICES Why are they important? Last week I had to purchase some equipment for the local company I do accounts for. As there was approximately €100 VAT involved I asked for an invoice in the shop. It was written out on headed paper in front of me and no copy made for the sellers records (and VAT return). Although it was just enough information for our records to be able to claim the VAT back I wondered if the VAT paid would actually make it to the Revenue’s coffers. This struck a chord in my Accountancy brain as it didn’t balance! Over my years in accounts I have seen many invoices; some are laid out simply and correctly, some don’t give the required information and some could be easily copied for VAT and accounts fraud. Businesses should be aware that when a VAT inspection is made of company’s books the officers take note of invoices from other companies and their VAT numbers and they have the authority to trace these invoices back to ensure the VAT has been accounted for properly. Of course if someone wants to commit fraud they will find a way to do it no matter what, however to try and make sure your company invoices are not used here are a few steps to follow and also to ensure your invoices are actually valid for VAT purposes. The points marked with a ** are compulsory for VAT invoices. Use headed paper, preferably with a company logo that is coloured. * Print your invoices on special paper rather than the normal copying printer paper. * Two-part or three-part invoice paper is great as your copy will match the customers copy. On the three-part invoice the third sheet may also be a delivery note if applicable. * Your company name, address and contact details should be on the invoice ** * Your VAT number must be on the invoice if you are VAT registered ** * Your company registration number should be on the invoice if you are a Limited company. * Decide on an invoice layout and keep to it. * There must be a date on the invoice. ** * There should be an invoice number that runs consecutively from your system. ** * Your customer’s company name and address should be on the invoice. ** * A description of the service/product sold must be on the invoice. ** * A net amount before VAT will be shown. * The VAT percentage rate will be shown. * The VAT amount will be shown. ** * A total for the invoice will be shown and a currency sign, e.g. €, £, $. ** * Payment terms should be on the invoice. * Show any other information that is applicable, e.g. delivery date, item prices etc. * Ensure a hard copy invoice is posted even though you may have emailed it. If you are not VAT registered you cannot charge VAT on your invoice. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!! Lynch Book-keeping Services, Clonmel 085-2052600

15. Consistency You should analyse your expenses on a consistent basis, or else your accounts will become meaningless and have no managerial value to you. You shouldn’t analyse licenses under “legal expenses” in one year, and under “subscriptions and licenses” in another. This would make it impossible to draw comparisons between one year and another. Many accounting packages provide assistance for standardising the analysis of your accounts, and you should learn the functionality of your accounting package to make consistency an easy task. Subscribe to the page to make sure you don't miss out on helpful do's and don'ts for your accounts!! If you or anyone you know needs help balancing their accounts contact us! Please like and share!! Lynch Book-keeping Services, Clonmel 085-2052600