Income is hard earned these days and with the top rate of personal tax and levies amounting to over 50% that’s like working almost six months of every year for the Revenue.

The good news is that you can legitimately reduce your tax bill. It is often reported that many of Ireland’s most successful business people pay the least amount of tax.

They recognise that tax is a cost just like any other and this cost can be managed and reduced with proper planning and advice.

Here are some of the more simple and practical tax reduction strategies which are relevant for the smaller business owner:

1. Keep proper records - This might sound obvious but many businesses miss out on legitimate tax deductible expenses or incur unnecessary add backs or penalties because their accounting records are not sufficient to capture and support all of the expenses that they are entitled to claim.

2. Research your entitlements - Ask us, or take time yourself, so that you have a good understanding as to what tax deductable expenses are appropriate for your business.

3. Review your expenditure prior to year-end - It may make sense to bring forward expenditure that you had planned on either equipment, repairs or other items prior to your year end to capture that tax relief within the current year.

4. Fund capital expenditure to maximise tax relief – If you purchase equipment from cash flow or by loan you get relief at 12.5% i.e. over eight years. It may be appropriate to purchase equipment by lease purchase and claim the tax relief over the lease period i.e. three years.

5. Employ spouses or other family members – It can sometimes be tax advantageous to employ spouses or other family members provided that you can create and justify their role within the business.

6. Change your year-end - If your business is seasonal or if your profit levels are either increasing or decreasing it may be worthwhile in certain circumstances changing your year end.

7. Manage your preliminary tax - Opt to pay your preliminary tax based on the current year estimates where your income is falling.

8. Maximise Tax free mileage and subsistence - Revenue permit the payment of mileage and subsistence tax-free provided the appropriate documentation is maintained.

9. Consider incorporating to a limited company - There are other considerations to be examined in forming a company, but it may be appropriate to achieve a tax advantage if you are generating profits over and above the level required to fund your personal living expenses.

10. Prepare management accounts prior to year end - Quantify your potential tax liability prior to your year end to give you sufficient time to plan and manage your tax bill.

11.Tax based investing

Explore the possibility of sheltering some income by tax efficient investing through the Employment Incentive Investment Scheme or Pension

12. Plan ahead and invest some time

Talk with us if you have any major efforts occurring in your business, property acquisition or retirement, which may have tax consequences and plan ahead an appropriate strategy for your circumstances          

With interest on offer from the banks and building societies at an all time low and likely to remain low for the foreseeable future we have 3 options that we believe will deliver good returns over the next few years.

Remember if you invest into a life assurance fund you pay no DIRT tax on your savings until you draw down on your savings, so your money grows tax free.

1) Zurich Launch Easy Access Investment Bond

The main details are as follows

• 100% access to any part of your savings without penalty, normally exit penalties apply for first 5 years but not with this new account.
• Minimum investment is €5000 Max is €50,000
• You can invest into any one of Zurich 59 funds , including their Low risk SuperCAPP Fund and 5 risk rated Multi Asset funds which have all delivered exceptional results over the last 12 months
• SuperCapp fund is a perfect fund for the low risk investor who wants to get slightly better than bank deposit returns , with return of 19% over the last 5 years
• On line access so you can monitor the progress of your investment
• Facility to switch between funds at no cost to the investor
• Investing with Zurich ,award winning investment manager 

2) Friends First, Irish Commercial Property Fund

We expect this fund to deliver returns of between 8% and 10% this year. Irish commercial property is experiencing a pickup in activity with approx €1bn of Irish commercial property bought in Q1 2015. Also the weakening of the Euro relative to sterling and the dollar has brought interest from the UK and US.

Main details are as follows

• Friends First own 19 properties all mainly in Dublin with no borrowing or debt to service in relation to the properties.
• Properties are in really good locations including , Stephens Green , Grafton Street , Blackrock Shopping centre , Royal Hibernian Way and Pavilions SC in Swords. 
• Vacancy rate in Dublin prime office space is now less than 2%
• Office sector is driving the recovery and Retail sector is expected to pick up in 2015 and Friends First have a number of high quality retail units.
• Bank finance is becoming more readily available which is also increasing demand.
• Average lease term is now 7 years

3) Aviva AIMS, Multi Strategy Fund

This fund is aiming to achieve a return of 5% per annum above the ECB base rate , before charges over a rolling 3 year period.

This fund seeks to deliver returns by identifying investment opportunities across and within a wide range of different asset classes e.g. equities, bonds property etc.

If you are interesting in finding out more about this and other fund that we have available please contact me Colm Kelly at 01 8700370 or 087 4191999

These funds are available for either lump sum or monthly investment or both together.

Do people really believe this statement to be true?

In general a consumer understands that a difference in quality of product is reflected in the purchase price. Simple examples would be clothing, electrical goods or even a meal in a restaurant. You can probably expand this list to every single purchase you make.

However, why is this logic totally dismissed when it comes to purchasing an insurance policy? Do people believe they receive the best value from the cheapest insurance product?

The answer is that insurance is a reluctant purchase. Therefore people just want to pay as little as possible and generally file it away for another year. 

It is a fact that insurance companies have become more difficult to deal with. All of them face constant pressure from their Global Head Office / Shareholders to generate maximum profit. In order to get business onto their books, an insurance company product has to be competitively priced. Therefore, they must take actions to control their overheads. Such actions include:

• The reduction in the administration costs. The biggest such cost is staff salaries.
  • Therefore, do not be surprised if you end up dealing with a call centre, possibly not even operating in Ireland.
• The reduction in claim costs. Insurance companies forget that their claims settlements are in fact their real shop front.

Therefore, be aware of what you are really getting for your purchase. All products and insurance companies are not the same. With any purchase you make you should establish if the person who sells you the goods is the same person you deal with if you want to gain the benefit of your purchase.

One simple action can be taken by you when it comes to your decision to purchase insurance. This will ensure that you improve the quality of your purchase. Take independent and professional advice. Speak to an insurance broker before you commit to a purchase. This can be free or maybe provided at a small charge. It may ultimately save you a lot more than the price of a policy.