While some are hoping An Taoiseach may ask John O’Donoghue to repay some of his gross overspending, we are a little more realistic. We know they’re both cut from the same cloth, and thus Cowen will never ask Johnny to cough up.
However, the Revenue Commissioners, an independent body, tell us that benefit-in-kind tax can apply to a holder of public office whose spouses’ expenses were paid for by the taxpayer. It therefore may apply to travel undertaken by Kate-Ann O’Donoghue when she was not partaking in “official business”. If Kate-Ann traveled but was not attending meetings or conferences as the wife of the minister, then the tax would apply.
Revenue don’t comment on individual cases but we wonder how much of the expenses incurred constituted official business. Are the trips as a whole official business or do Revenue take each expense on its merit?
Do water taxis count? VIP facilities in Paris?
Note: Unfortunately the Public Accounts Committee would probably be required to direct Revenue to investigate this, as they did with Rody Molloy. Unlike Rody, Junket John is politician, so are the members of the PAC… there’s more chance of them doing it than Cowen making the order, but I wouldn’t hold my breath.
Mark
I recall you put in an enquiry about this to the Revenue last August. I assume you got nowhere with them?
MC
http://puckstownlane.wordpress.com/2009/08/24/memo-to-revenue-commissioners-john-odonoghue-may-owe-you-money/#comments
Now I know where I got that lead. Cheers.
I did, they refused to comment on any individual cases and would only tell me that office holders are subject to the tax also. Nothing more.
As I see it Mr. Junket Jonny must be in it up to his neck for benefits-in-kind TAX
Looking at what the revenue says on their own website, this is of course, the same for all Politicians
It would be interesting to know what benefit-in-kind tax has being paid by these people and not forgetting their spouses.
with a little creative accounting he and his collogues will have no trouble avoiding this tax liability
Generally, there are two types of benefits that an employee may get in addition to a salary:
• Benefits-in-kind. These are benefits that an employee receives that cannot be converted into cash but have a cash value. Examples include provision of a company car, loans given at a special rate or provision of accommodation.
• Benefits (other than benefits-in-kind). Examples include vouchers, holidays, payment of an employee’s bills and prizes.
Budget 2009
Rules
All employees who earn more than €1,905 per year pay tax on the value of any benefits and benefits-in-kind.
Taxation of benefits (other than benefits-in-kind), is made literally on the value of the benefit. For example, an employer provides you with a holiday voucher worth €2,000. This is treated as €2,000 income for tax purposes and is taxed accordingly.
The rules applying to benefits-in-kind vary. Generally, the value of the benefit-in-kind is the cost to the employer of providing the benefit less any contribution by the employee. Special rules apply to the following benefits-in-kind:
• A car
• Other motor vehicles
• Loans
• Provision of living accommodation.
An employee can reduce the amount of benefit-in-kind assessed on a car they incur a certain amount of mileage for business purposes. The benefit-in-kind can be further reduced if an employee contributes to insurance costs, motor tax and petrol. Details on these rules regarding benefit-in-kind and cars are contained in the Revenue
Benefits that are exempt from tax or can be received tax efficiently
There are some benefits that an employee can receive that are not subject to tax or can be received tax efficiently. These include:
• Provision of bus/train passes for one month or more
• Bicycle and safety equipment, the first €1,000 spent is exempt. You can get the exemption once every 5 years.
• Free or subsidized childcare
• Certain share and approved profit sharing schemes
• Canteen facilities
• Reimbursement of expenses necessarily incurred in the course of employment
• Some accommodation provision
• Lump sum and certain redundancy payments
• Working clothes
• Non-cash personal gifts not related to employment
• Employer’s contribution to statutory or revenue approved pension schemes.
• Mobile telephones, computer equipment and home high-speed internet connections where those benefits are provided for business use. (Private use is incidental).
• Subscriptions to professional bodies where membership is relevant to the business of the employer
• Private use of company van which is essentially for the purposes of employee’s work and where there is an employer requirement to bring the van home and where other private use is prohibited and the employee spends most of their working time away from the workplace to which they are attached.
This is not an exhaustive list and conditions and/or restrictions often apply to exemptions and should therefore be checked with the Revenue Commissioners.
Collection of tax from employment benefits
The tax, PRSI and the Health Levy to be collected from all benefits-in-kind are deducted by your employer at source. The Parking Levy will also be deducted by your employer.
Preferential home loans
A ‘preferential loan’ means a loan, made by your employer to you and/or your spouse, in respect of which no interest is payable, or interest is payable at a rate lower than the ‘specified rate’. An employee in receipt of a preferential loan is charged income tax on the difference between the interest actually paid and the amount which would have been payable at the ‘specified’ rates of interest for the loans. The specified rates are as follows:
From 1 January 2009:
• Loan for home (principal residence): 5.5%
• Other loans: 15%
• These Loans are a particular interest with regards to the Bank Loans to their own Directors, I ‘am thinking of the Anglo Irish Bank, Allied Irish Bank, etc!!
• If your employer provides you with a benefit with a value not exceeding €250, PAYE and PRSI will not be applied to that benefit. No more than one such benefit received by you within a tax year will qualify for such treatment.
• Where a benefit exceeds €250 in value, the full value of the benefit will be subject to PAYE and PRSI deductions.