CACM Accountants — Certified Public Accountants

Dear Reader,

This month CACM Accountants is celebrating its first year in business. Thank you to all who sent birthday cards, gifts and well wishes. I very much appreciate your kind words and continued support. I am happy to report that our first 12 months has seen very positive growth results. I believe this is due in part to our ethos of providing a high quality, personal service as well as being proactive with our clients and their business needs.

The utilisation of social media and the internet has been fundamental in not only getting our word out there, but has made us more accessible to business owners outside the traditional office hours through a medium that suits them - phone, email, our website as well as Twitter, Facebook and LinkedIn. We have had fantastic support from CPA Ireland, the Cork Chamber and Network Cork. It has been a very positive experience to date and I am really looking forward to the next 12 months. Watch this space for future developments! This month our articles include all you need to know about AUDIT EXEMPTION and VAT "101". Please feel free to pass on our ezine to anyone you feel maybe interested in any of the articles.

If you have any queries or require further information or assistance with any of the topics below, please do not hesitate to contact me to arrange your free initial consultation on 021 421 7474 or e-mail: info@CACMaccountants.ie Don't forget, you can follow CACM Accountants on LinkedIn, Twitter and become a fan on facebook by clicking the links to the  left of this page.

Carla Manning ADCA, CPA

KBC Ireland/ESRI Consumer Sentiment Index improves again in June.

The overall KBC Ireland/ESRI Consumer Sentiment Index increased in June to 65.3. This compares to a figure of 65.3 in May and at its all time low in July 2008 when the index was at 39.6.

Commenting on the results David Duffy, ESRI, said

- "Consumer sentiment improved slightly in June. This recent increase brings the index to its highest level since October 2007."

- "The improvement reflects a more positive assessment by consumers of both the current situation and also the forward looking components of the index. The Index of Current Conditions rose to 88.4 compared with 82.5 in May, while the Expectations index increased to 54.1 from 53.7 in May."

- "Expectations rose as there was some improvement in consumers perception of the economic outlook. However, consumers remain concerned about the outlook for employment and for their household finances over the next 12 months."

In addition, Austin Hughes, KBC Ireland, noted:

- "The June Consumer sentiment results are encouraging. Although they suggest Irish consumers are still very cautious and conditions remain difficult, they also hint that fear is fading and many consumers are beginning to sense an improvement in general economic conditions and their own circumstances. These results point towards an economic recovery that may be modest and fragile and one that is not being felt by all, but, nonetheless, they suggest the Irish economy is moving in the right direction."

- "Consumer sentiment improved modestly in Ireland and the US in June but morale among European consumers was hit by growing concerns that living standards will weaken as pension and welfare entitlements are cut. For the past couple of years, European consumers have been cushioned to a notably greater extent from the fallout of the financial crisis. Now, as Irish consumers appear to see a little more light at the end of the tunnel, their continental counterparts are beginning to contemplate a more difficult future."
 

Note:- Since May 2008 the KBC Ireland/ESRI Irish consumer sentiment survey was prepared using a slightly different methodology. While this may have a minor impact on the precise numerical estimates of various survey components, it should not have any significant effect on the broad trend reported.
 

Download the full report here.                  Download the Indiceis report here. 

RETURN AND PAYMENT DATES FOR THE MONTH OF AUGUST 2010 

14th August 2010
PAYE/PRSI:
P30 monthly return and payment for July 2010

DWT: Return and payment of DWT for July 2010

PSWT: F30 monthly return and payment for July 2010

RCT: RCT30 monthly return and payment for July 2010

21st August 2010
Corporation Tax, Preliminary Tax for Accounting periods ending between 1st to 30th September 2010

Returns for Accounting Periods ending between 1st to 30th November 2009

Pay balance due on Accounting Periods ending between 1st to 30th November 2009

31st August 2010
Returns of Third Party Information for Accounting Periods ending between 1st to 30th November 2009.

Audit Exemption - Does your company qualify?

The majority of Private Limited Companies are required to attach audited financial accounts to their annual returns under the terms of the Companies Amendment Act, 1986. However, companies that meet specific criteria are allowed to avail of an exemption from the requirement to have their financial accounts audited. In order to be eligible to avail of audit exemption, a number of conditions must be met by the company.

• The main conditions that must be met in order to avail of audit exemption are:
• The company must be a Private Limited Company
• The amount of turnover of the company must not exceed €7.3 million
• The assets of the company must not be greater than €3.65 million at the end of its financial year
• The average number of employees must not exceed 50
• The annual return (plus relevant financial accounts) must have been filed on time for the previous year
• The annual return (plus relevant financial accounts) for the current year must be filed on time
• The company must not be a parent company or a subsidiary company
• The company must not come within one of 19 classes of companies listed in the Second Schedule to the 1999 Act

All the conditions must be satisfied for both the current year and the previous year. The most common reason that we see for companies losing Audit Exemption is the failure to file an annual return on time. As well as incurring a penalty of €100, late filing fees of €3 per day accumulate for every day that the return is late. Where an annual return is filed late, the company loses its entitlement to claim audit exemption not only for the year in question but for the following year also.

For further information on audit exemption or any other company office queries that you may have please do not hesitate to contact CACM Accountants on 021 421 7474 or e-mail:info@CACMaccountants.ie
 

VAT - Back to Basics

Are you a new business? Are you an existing business? Have your circumstances changed? If so, do you need to be registered for VAT? Any business selling products or services must register for VAT (unless its supplies are VAT-exempt) if the turnover exceeds certain thresholds as follows:

- €37,500 per annum on the supply of services

- €75,000 per annum on the supply of goods.

If turnover levels are expected to be below these limits, a business can elect to register for VAT even though it is not required to do so. This may be advisable if a significant amount of VAT has been incurred on commencing a business such as pre-trading expenditure.

VAT can be accounted for on an "Invoice Basis" or a "Cash Receipts Basis". The advantage of cash receipts basis is that VAT can be paid on the basis of when cash is received rather than when the invoice is issued. This can have a huge beneficial effect on cashflow. To be eligible to account for VAT on cash receipts basis, annual turnover (excluding VAT) must be less than €1 million or 90% of turnover is from Vatable supplies to non-VAT-registered people.

The rate of VAT chargeable on your supplies will depend on the nature of the product or service. The supply of certain goods and services is exempt from VAT, while other supplies are subject to VAT at rates of 0%, 13.5% or 21% and for farmers 4.8% and 5.2%. If the supplies are VAT-exempt, you will not be entitled to recover any input VAT on your costs. Generally, VAT can be reclaimed on expenditure incurred wholly and exclusively for the purpose of the business. As with every rule, there are exceptions - no business can recover input VAT on expenditure on any of the following, even when the goods and services are used for the purposes of the business:

• personal services
• accommodation other than qualifying accommodation in connection with attendance at a qualifying conference
• food or drink
• entertainment expenses
• the purchase, intra-Community acquisition or importation of petrol (other than as stock)
• contract work involving the handing over of goods when such goods are themselves not deductible.

Motor Vehicles

The purchase, hiring, intra-Community acquisition or importation of passenger motor vehicles generally (other than motor vehicles held as stock)are non deductible for VAT purposes. Non-deductible motor vehicles for VAT purposes includes:

• cars generally,
• sports motor vehicles,
• estate cars,
• station wagons, and
• motor cycles,motor scooters, mopeds and autocycles and other single person vehicles.

Valid VAT

Invoices VAT law contains specific requirements in terms of the information that must be included on invoices, including the date of issue, a sequential number, the full name, address and VAT registration number of the supplier, and the full name and address of the customer. Applying the correct VAT rate to your supplies is essential, and it can be a complex process if you are supplying a variety of products or services.

If you are not charging the correct rate of VAT or if you are claiming VAT inputs incorrectly, you may be subject to significant interest and penalties should the matter be uncovered during a Revenue audit.

Cancellation of VAT registration

A person who has elected to register for VAT (even though not required to do so by law) may cancel their registration. However, it is a condition of such cancellation that they pay to Revenue any excess of VAT refunded to them over the tax paid for the taxable periods during which the election had effect or three years prior to the date of application for cancellation, whichever is the lesser. In certain circumstances a cancellation of registration will give rise to recovery by Revenue of net VAT repaid to the person during the period of election.

A person whose turnover has fallen below the appropriate turnover threshold may deregister for VAT. So long as the business did not originally elect for registration there will be no clawback of any VAT refunded previously.

Where a farmer who would not otherwise be an accountable person has elected to register for VAT and wishes to cancel that election then the review period is also the period for which the election had effect or three years, whichever is the lesser.

VAT can be quite a complex area with almost as many exceptions as there are rules. If you are involved in any business transactions that are different to your normal day to day transactions, in particular in relation to any property transactions, you should seek professional advice in advance.

If you have any queries regarding VAT, please contact us on 021 421 7474 or by e-mail on info@CACMaccountants.ie

CACM Accountants strive to offer the best possible service for its clients. With vast business experience, across many business sectors, we will always keep our clients at the heart of our firm.

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