Motivation post: No Retreat baby No Surrender

 Motivation Blog Post: Tenacity

I have always been a determined kind of a person. I set up my own business from scratch and have driven forward with what I felt was a significant level of drive and ambition, until I met one of my current business partners, Martin Finucane and realised I was only trotting behind his tenacity. His determination to sell our new product the Able Table is beyond phenomenal and is the major reason for the success of our business venture.

Its something people are lacking often in their work ethos or business plan. They have a great idea, they have the right attitude to risk but they fail because they wont keep pushing against the wall of consumer resistance and self doubt.

The lesson we all need to learn is not to give up, to keep pushing, until the resistance and obstacles crumble in response to the pressure we are exerting.

Negative responses, negative people and negative thoughts all need to be banished when you are self employed.

Positivity not only should but absolutely must be the corner stone of your philosophy and modis operandi.

Don't accept no for an answer, keep going until a sale is made, until the deal is struck or the suppliers price is reduced.

Its not just in sales but everywhere in an organisation. Purchasing, human relations, product design and in every aspect of a business there is only one road to success and that's with a positive determined attitude of no retreat and certainly no surrender.


(c) Frank McGivney 03 June 2016

Frank McGivney & Co Ltd, Chartered Management Accountants, Kells, Co. Meath, Ireland
Telephone 0469293891

How to pay the Local Property Tax

The previous two articles have all been about the consequences and the context of the property tax. This one is just about how to pay it.
(1) Notices issued by the Revenue commissioners. The revenue commissioners will issue most houses with an estimate of the property tax. If you are happy with the value that they put on your house then just agree with their estimate and pay it. (i will detail payment options below).
(2) If you do not agree with the value that the revenue is putting on your house then you can fill out the form that they send you with the value that you feel is correct and pay this amount. Take a look at recent house sales (if there has been any) in your local area for similar houses and this will give you some guidance. The revenue have an online property value guide which is easy to use you just choose your county, type of house and if house was built before or after 2000. Then you click on your area on a map of Ireland and it gives you a value. Also if you go to https://lpt.revenue.ie/lpt-web/valuation-guide/index.htm and click the ok box on the side of the page you can get a list of properties sold in your area for last few year. Saying that the revenue do appear to have put fairly low values in the letters they are sending out.
(3) The paper LPT form is easy to fill out.  Your name and address is filled out automatically by revenue when they send it to you and then you fill out the name of the person liable for the tax (this is essentially the person who owns the property at the 1 Novemebr of the preceding year or the 1 may 2013 for this year), your pps number then you can mark a box if the property is exempt or if it is not your principal private residece (you still have to pay the tax) and if you are non resident for income tax purposes (you still have to pay the tax). Then you enter the band number for the value of the property and the value you feel the property is worth and the amount of tax you need to pay (see below for how to calculate) . Then sign and if you are not the liable person then who are you i.e. their son or daughter etc. Enter your phone number and email address (if you have one). Finally you enter payment details by choosing one of the option available as detailed below.
(4) Online form this is essentially the same as the written form but with an additional option to pay by credit card or debit card.
(5) how to calculate your local property tax liability The tax for properties up to Euro 1 million in value is calculated at .18% of the mid point of certain bands. These are the bands and the amount of tax due. So to calculate the tas just decide what you feel is the value of your house and then find what band that value is in and then the tax across from this band is how much you owe in 2013
Valuation
Band Number   Valuation               Mid-Point                    LPT Charge in 2013            LPT Charge in 2014
                         Band Range         of Valuation Band (€)    Half year charge) (€)            (full year charge) (€)
01                      0 – 100,000                 50,000                          45                                       90
02                      100,001 – 150,000      125,000                        112                                      225
03                      150,001 – 200,000      175,000                        157                                      315
04                      200,001 – 250,000      225,000                        202                                      405
05                      250,001 – 300,000      275,000                        247                                      495
06                      300,001 – 350,000      325,000                        292                                      585
07                      350,001 – 400,000      375,000                        337                                      675
08                      400,001 – 450,000      425,000                        382                                      765
09                      450,001 – 500,000      475,000                        427                                      855
10                      500,001 – 550,000      525,000                        472                                      945
11                      550,001 – 600,000      575,000                        517                                      1,035
12                      600,001 – 650,000      625,000                        562                                      1,125
13                      650,001 – 700,000      675,000                        607                                      1,215
14                      700,001 – 750,000      725,000                        652                                      1,305
15                      750,001 – 800,000      775,000                        697                                      1,395
16                      800,001 – 850,000      825,000                        742                                      1,485
17                      850,001 – 900,000      875,000                        787                                      1,575
18                      900,001 – 950,000      925,000                        832                                      1,665
19                      950,001 – 1,000,000   975,000                        877                                      1,755
20 Value greater than €1m Assessed on the actual value as follows:
● at 0.18% on the value up to €1m
● at 0.25% on the portion above €1m


(6) Payment options are as follows
 LPT can be paid in full by:
● Single Debit Authority - like an electronic cheque. To select this option complete the payslip on the
Return and payment will be deducted from your bank account no earlier than 21 July 2013.
● *Debit/Credit Card.
● *Cash payments (including debit/credit card) through approved Payment Service Providers.
LPT can be paid on a phased basis from 1 July 2013 by:
● Deduction at source from your salary or occupational pension.
● Deduction at source from certain payments received from the Department of Social Protection
(DSP) and scheme payments received from the Department of Agriculture, Food and the Marine
(DAFM). Deduction from a DSP payment cannot reduce your DSP personal rate payment to less
than €186 per week.
● *Direct Debit.
● *Cash payments (including debit/credit card) in equal installments through approved Payment
Service Providers.
(7) The following persons are liable to pay LPT:
● Owners of Irish residential property, regardless of whether they live in Ireland or not.
● Landlords where the property is rented under a short-term lease (for less than 20 years).
● Local authorities or social housing organizations that own and provide social housing.
● Lessees who hold long-term leases of residential property (for 20 years or more).
● Holders of a life-interest in a residential property.
● Persons with a long-term right of residence (for life or for 20 years or more) that entitles them to
exclude any other person from the property.
● Personal representatives of a deceased owner (e.g. executor/administrator of an estate).
● Trustees, where a property is held in a trust.
● Where none of the above categories of liable person applies, the person who occupies, or receives
rent from, the property is the liable person.

(8) You can defer the payment if you cant afford to pay and you meet the following criteria. The tax is attached to your property and will be deducted when you sell the property and interest is charges at 4% per year.
Full Deferral
(a) Gross income for the year is unlikely to exceed €15,000 (single or widow/er) and €25,000 (couple).
(b) Gross income* for the year is unlikely to exceed the adjusted income limit. This adjusted limit is calculated by increasing the thresholds of €15,000 (single or widow/er) and €25,000 (couple) by 80% of the expected gross mortgage interest payments for the year 2013.
 Partial Deferral (you defer half of the amount due but pay the other half as per normal)
(c) Gross income* for the year is unlikely to exceed €25,000 (single or widow/er) and €35,000 (couple).
(d) Gross income* for the year is unlikely to exceed the adjusted income limit. This adjusted limit is calculated by increasing the thresholds of €25,000 (single or widow/er) and €35,000 (couple) by 80% of the expected gross mortgage interest payments for the year 2013.

Will the Property Tax be the reason for a government falling

In the 2013 Finance act the Irish Government are bringing into law a property tax, The first such tax in Ireland in many years. The British empire imposed a window tax in Ireland in 1696 which was in effect a property tax.This needed a shocking amount of detailed legislation to impose because as you would expect the people of Ireland did all kind of adjustments to their windows in order to avoid it. Further on in the  1800's the payment of taxes to land owners which was then sent over to London left Ireland  in the grips of a crippling famine in a country with the some of the most fertile land in the world. So will the current Irish government have any more success with imposing this property tax.
 You only have to look at the main street of any small town in Ireland and you will see a scene that you would see in any horror movie where the streets are deserted of humans. Then if you drive through any of the housing estates you will see cars in all the driveways during the daytime, a sign that people are at home rather than at work. The government is constantly talking about its efforts to attract foreign investment which is all great. However to me it appears to be ignoring Irish indigenous business. Small Irish business are been devastated with a lack of trade. It is in this context that the government is imposing a high property tax which will take even more money out of the Irish economy. There is nothing wrong with high taxes if that tax is reinvested in the economy through government spending but this is not the destination of this tax  because all government spending is been reduced or frozen at present. Therefore all additional taxes are ultimately going to be used to repay the debts of either the banks or the government or to repay bondholders. This tax will reduce the amount of money people have to spend in the local shops and businesses. This will further suppress the economy and reduce the amount of vat collectible from businesses, It will also reduce the amount of people employed and the amount of tax from employees and the amount of income tax and corporation tax collected. In other words the amount of tax from the property tax will be offset to a large extent from a reduction in other taxes. Regardless of the government saying the tax will be targeted to local authorities this effect will still happen because the expenditure on local services is to be maintained at current levels or lower levels. Therefore the spin that the tax will be used on funding local services by the local authorities will have no net effect on local output (because it would have been spent anyway) but conversely the reduction of money in people’s pockets will have a dramatic effect.

This tax is in my opinion a fundamental shift from the way tax has been imposed in Ireland in regard to PAYE workers. Self-employed people are used to paying taxes out of the money they have received. However Paye workers get their wages net of tax. This also applies to social welfare recipients. Up to this people can spend their net income in whatever way they want to. However now the property tax will have to be paid out of their net income’s. This means for the first time a lot of people will have to pay tax themselves. It can be argued that motor tax is similar but there is one big difference, motor tax is only due to be paid if you decide to own a car and it is not imposed in the fashion that this property tax is proposed. The majority of Irish people have had very limited exposure to the revenue commissioners. But this is about to change with the property tax and people will discover that if you owe the revenue money then they will do everything to make sure you pay it and will not take no for an answer. In other words everyone who is due to pay this tax will end up paying because it will be deducted from social welfare payments or from net income by your employer, Even if you can avail of the deferral option you will still eventually pay it. However I feel that this may be the moment when Irish people finally stand up for themselves and the resistance to this tax will be significant, as evidenced by the huge percentage of people who have not paid the household charge from last year and also because people are in such a poor financial position that they simply can not afford to pay it.

I do believe that a country should have a property tax. It should be part of an overall tax system. I should be very progressive with normal value homes been at a very low rate of for example €100 per year and then higher value houses owned by high net worth individuals should be subject to much higher property tax charges. The tax however needs to be linked to take account of people’s incomes and levels of assets other than the family home.   The spread of income in the world is represented by a Lorenz curve with very few people holding most of the wealth therefore this should be reflected in the overall tax system. This means people are responsible for paying for their local amenities but not to a level where there is a negative effect on the economy.   There is a lot more issues involved such as using the taxes of the country on proper government spending in the economy rather than paying back bonds to banks and bondholders who are seemingly the only ones in the world protected from the risks associated with business.  Maybe a tax once again will topple a government like the vat on children’s clothes did in the 1980’s

Basic structure of tax

I was writing an article on the new property tax and i was trying looking at it from the angle of fairness and its effect on the economy but I got side tracked a bit when i started thinking about taxes and what they are. So I wrote this piece on tax and how it should be structured. I intend this article to help put the property tax in the correct context for the next article. Some basics about tax: Governments get money in various ways. Some of these are
 (1) taxes
 (2) other sources include fines (i.e. Speeding fines, parking fines),
 (3) income from state run organizations (i.e. contributions from state universities student fees, revenue from profitable state bodies)
 (4) Printing currency by the central bank (not an option for euro countries anymore)
 (5) Borrowings and so on.

Taxes could be defined by the following

(1) they should be non penal. i.e. they should be based on a percentage of income or wealth that is fair and equitable

 (2) They should be compulsory , i.e. you have no option but to pay them

 (3) The government should impose them by way of the law of the country

(4) taxes should be in essence a transfer of wealth from the private to the public sector (i.e. government)

(5) they should based on preset criteria as laid down in the tax laws so that people can calculate how much they owe in the tax and know the basis of calculating the tax

(6) the tax paid should not be a reflection of services received i.e. its based on each taxpayers income or wealth and not on how much public services they receive. This is completely different to everything else you spend money on. The more books you buy in a bookshop the more you will pay but with tax often times those who pay the most receive the least amount of services. This is of course the redistribution of wealth from the wealthier to the poor. The ultimate model of this is perhaps communism

(7) The non payment of the tax should always punishable by penalties and fines and imprisonment. This is vital in order to ensure the tax is paid. Also it encourages people to pay on time by penalizing those who are late paying

 (8) It should be equitable and progressive. so the more you earn the more you pay and the greater your wealth the more you pay. Number 8 is one of the areas where problems arise with property tax because a person may have substantial assets which are very valuable but which generate no income and they may not be able to pay higher taxes based on wealth alone. However implied in the tax system is the premise that such a person should sell their assets until they are at a level where they can pay the tax. This is again complicated by taxes which arise when you sell assets.

Fundamentals of the Irish Vat System

Fundamentals of the Irish Vat System by Frank McGivney & Co. Chartered Management Accountants contact fmcgivney@live.com Vat stands for Value Added Tax and is a tax on the supply of goods and services. Its basic structure is such that the person who pays for the vat element of any product or service is the final consumer and the person who collects the tax and sends it to the Revenue Commissioners is the business that provides the good or service. As a product is sold through the chain of distribution up to the final consumer each of the businesses in the chain can in turn claim the vat element that they have paid for the product or service from the tax man. So if a manufacturer sells a chair to a distributor the manufacturer charges vat and the distributor then claims this vat back from the Revenue Commissioners. The distributor then sells the chair on to a retailer and charges the retailer vat on the sale and the retailer claims this vat back. When the chair is sold to a private consumer the retailer charges the consumer vat on the sale and the consumer can’t claim this back and the retailer must pay the vat to the tax man. So up until the final consumer the vat position for the tax man is nil. The manufacturer charges vat to the distributor and then pays this vat to the revenue commissioners. The distributor however claims this vat back and so as the Revenue

Commissioners receive the vat in it also pays it back out again. In the construction industry a major financial anomaly arose because the main principal contractors who paid subcontractors claimed the vat that they were charged immediately however in some cases the subcontractor who charged the vat didn’t submit and pay the corresponding vat until much later, or may not have paid it at all. Therefore the revenue commissioners were at a huge loss. As a result a Reverse charge system was put in to place as and from 01 September 2009 which meant that the subcontractors no longer accounted for vat at all but instead the principal contractor accounted for both sides of the transaction in his vat return thus the net effect to the Revenue Commissioners is nil. In practice how vat works is that a business registered for vat calculates how much vat it has charged on its sales for a certain period. It then calculates how much vat it has been paid on its purchases for the same period. If the vat on sales is more than the vat on purchases then the business owes the difference to the tax man and must pay it in a timely fashion or face interest and collection charges. If the vat on purchases is greater than the vat on sales then the business is owed vat from the tax man and will claim this back in its periodical vat return. Such refunds in Ireland can be offset against other outstanding tax liabilities or can be refunded to the business’s bank account if all its tax affairs are up to date. In Ireland the periods for vat returns are every two months or four months or six months depending on the size of the annual vat liability of a business. At the end of each year a business must also submit a trading return showing the net values for vatable sales and purchases during the preceding year i.e. this is the amount of total invoices before vat is charged. Subject to approval by the revenue commissioners a business may also set up a monthly direct debit for vat based on an estimated annual vat liability. The business then just puts in one annual vat return and pays or reclaims the difference between the total yearly direct debits and the actual return. A further article will look in more depth at the actual procedures and processes of accounting for Vat in Ireland. The turnover thresholds for registering for vat in Ireland are as follows: • a) €37,500 in the case of persons supplying services, • (b) €37,500 for persons supplying goods liable at the 13.5% or 23% rates which they have manufactured or produced from zero rated materials, • (c) €37,500 for persons making mail-order or distance sales into the State, • (d) €41,000 for persons making intra-Community acquisitions, • (e) €75,000 for persons supplying goods, • (f) €75,000 for persons supplying both goods and services where 90% or more of the turnover is derived from supplies of goods (other than of the kind referred to at (b) above) and • (g) A non-established person supplying taxable goods or services in the State is obliged to register and account for VAT irrespective of the level of turnover.
Get Credit card Payments from your customers using your smart phone

Prsi Rates Ireland

Pay related social insurance is a levy that the Irish govenrment imposed to pay for various social benefits that it provides to people in need of assistance. Its debatable if it has achieved its objective and the equity of some of its measures such as the fact that self employed people are not automatically entitled to 9 months of social welfare when they shut down. This contrasts with paye employees who have paid class a and who get an automatic entitlement to social welfare for the first nine months The rates are as follows Employees Earnings up to 18304 euro per annum or 352euro per week are exempt Above this you pay the following 4% on everything over the first 127euro per week or 6604 per annum. So if you earn 18304 per annum you pay no prsi. If you earn 18305 or more then you pay nothing on the first 6604 of you yearly income and 4% on the balance. This 6604 exemption is gone from January 2013 so its 4% on all income if you earn over 18304 Self employed pay 4& on all income with a minimum contribution of Euro253 per week in 2012 and Euro 500 in 2013 Employers pay 4.5% on an employees income up to 18512 Euro and 10.75 if you earn more than 18512 per year Frank McGivney & Co. Ltd, Chartered Management Accountants, 0469293891, Kells, Co Meath  If you are in business and need a way to collect customer payments with a credit card then click here

Medical Expenses Med1 Claim Tax Back

One of the most popular means of claiming back some of that hard earned tax you paid last year is by sending in a MED 1 form to claim your medical expenses. Its easy to fill out the form. You just add up all the receipts for all your family and enter them on the form as well as details from your P60. Routine GP fees and perscriptions are claimable. You need to have a MED2 form for your dental expenses. Your dentist will only give you one for claimable services. For more complicated claims and in particular nursing home expenses the guide below sets out details or contact me on 0469293891 fmcgivney@live.com. Assuming you have no other adjustments then multiply your total expenses by 20% and this gives you a rough figure of your refund (nursing home expenses 41%) Also you have to have paid at least that amount of tax in the year in order to claim the tax back (if you haven't it paid it you can't claim it)
 To receive Credit card payments on your smart phone
The Revenue Commissioners Guide to claiming Health or Medical Expenses Relief - IT6
 
General Information
Items of Expense
Dental Expenses
Dental Treatments for which Tax Relief is Allowable
Further Information
Kidney Patients

General Information
Introduction

You may claim tax relief in respect of the cost of certain medical expenses paid by you. Details on the main medical expenses that qualify for relief (qualifying medical expenses) are given in the Items of Expense section.

However, you cannot claim tax relief for any expenditure which:

has been, or will be, reimbursed by another body such as the VHI, Laya healthcare, Hibernian Aviva Health, the Health Service Executive or other body or person
has been, or will be, the subject of a compensation payment
relates to routine dental and ophthalmic care.

If you have a query regarding any medical expense, you may contact your Regional PAYE Lo Call Service.
Is there a time limit for making a claim?

Yes. A claim for tax relief must be made within 4 years after the end of the tax year to which the claim relates. Therefore, to claim for the year 2008 you must submit your claim before the end of the year 2012.
Who can I claim tax relief for?

You may claim tax relief in respect of any qualifying health expenses paid by you in respect of any individual.
Can I claim tax relief on the full cost of the qualifying health expenses?

Yes, since 2007 tax relief is available on the total amount of qualifying expenditure.
At which tax rate is the relief given?

Relief will be allowed at the standard rate of tax (20%) with the exception of nursing home expenditure which is allowable at the higher tax rate (41%), if applicable.
The following table sets out the rate of tax at which relief is allowed over different years 2009 2010 2011 2012
Health Expenses Standard Rate Standard Rate Standard Rate Standard Rate
Nursing Home Expenditure Highest Rate Highest Rate Highest Rate Highest Rate
How is the tax relief given if I incur a Health Expense in one tax year and pay for it in a later tax year?

In these circumstances you have two options, you may claim the relief in the year in which you incur the expenditure or you may claim the relief in the year in which you pay for the expenditure.

Example

Qualifying health expenses incurred in December 2010 cost €1,000. €700 was paid in December of 2010 and €300 was paid in May of 2011. You can claim relief in either of the following ways:

claim tax relief on the €1,000 in the 2010 tax year, or
claim tax relief on the €700 in the 2010 tax year and €300 in the 2011 tax year.

What if more than one individual contributes to the cost of qualifying health care?

Each individual can claim relief in respect of the portion paid by him or her.

Back to Top
When can I make a claim?

Claims for tax relief for health expenses should be made after the end of the tax year in which the expenses were incurred. (However, see next question ).
I am a PAYE worker paying monthly nursing home fees for my mother – Is it possible for me to get the tax relief due on these fees through the PAYE system during the tax year instead of waiting until at the end of the tax year?

Yes, in certain circumstances relief may be granted during the year. You should contact your local tax office with details of your claim. If the claim relates to the year 2010 and subsequent years of assessment the nursing home in question must provide qualified nursing care on-site on a 24-hour per day basis.

Note for the year 2009 the nursing home must be on the Revenue list of approved hospitals and nursing homes to qualify for the relief.

In all cases you must submit a completed Med 1 Form in the normal way at the end of each tax year. (See next question.)
How can I claim tax relief in respect of qualifying Health Expenses?

You may claim tax relief by:

claiming online via Revenue's PAYE Anytime service
completing pdfForm Med 1 - Health Expenses Claim for Tax Relief (PDF, 1.14MB) and submitting it to your local Revenue office
if you use a pdfForm 11 (PDF, 642KB) to make a tax return and claim reliefs and credits, by entering the amount of the health expenses claim at Panel I on the Form 11. There is no need to complete a Form Med 1 in this instance.

If the claim includes non-routine dental treatment (see Dental Expenses section), you must obtain a pdfForm Med 2 - Dental Expenses (PDF, 257KB) - Certificate by Dental Practitioner which is signed and certified by the dental practitioner. This is required whether you claim on-line using PAYE Anytime or submit your Form 11 on ROS.

Back to Top
Do I need to submit receipts with my claim?

No, claims for health expenses are processed on the basis of the information shown on the claim form. If claims require clarification during processing, you will be contacted and asked to submit receipts.

Note you should retain all receipts and forms Med 2 for a period of six years as your claim may be selected for detailed examination in the future.
My neighbour works in my local tax office, can I ask to have my Health Expenses claim processed in a different tax office?

Yes, if you do not wish your local office to know the nature of your medical condition you have the option of having the claim examined by a Revenue office other than your local Revenue office. Please submit your claim in a separate sealed envelope attaching your request clearly stating that for reasons of confidentiality you wish to have the claim processed in a different office. Your local district will refer the claim to the appropriate area and advise you of the contact details for your records.

Alternatively you may call in person to any of Revenue’s information offices and request the case be processed in an area other than your local area.
Can I claim relief on the cost of medical treatment obtained outside the State?

Yes, you may claim for expenses incurred abroad. The following expenses qualify for tax relief:

the cost of qualifying treatment carried out by a practitioner (GP, consultant or dentist) provided such practitioner is entitled under the laws of the country in which the care is provided to practice medicine or dentistry there
the cost of maintenance or treatment in a hospital, nursing home or clinic provided the expenses incurred are in association with the services of a practitioner or in connection with diagnostic procedures carried out on the advice of a practitioner.

Note for the year 2009 the institution must be entered on the Revenue list of approved hospitals and nursing homes. This requirement does not apply for the years 2010 and following years. However tax relief will only be allowed where the maintenance or treatment in a hospital is in connection with the services of a practitioner and/or, diagnostic procedures carried out on the advice of a practitioner.

Where the relevant qualifying health care is only available outside of the State, then the cost of reasonable travelling and accommodation expenses are also allowable. In such cases, the expenses of one person accompanying the patient may also be allowed where the condition of the patient requires it. Where the patient is a child, the expenses of one parent may generally be allowed and, exceptionally, of both parents where it is clear that both have to be in attendance.

Back to Top
Items of Expense
What category of Health Expenses qualify for tax relief?

Only health expenses incurred in the provision of 'health care' qualify for tax relief.
What is 'health care'?

For the purpose of claiming tax relief 'health care' means prevention, diagnosis, alleviation or treatment of -

an ailment
an injury
an infirmity
a defect
a disability

and includes care received by a woman in respect of a pregnancy as well as routine maternity care.
What are qualifying health expenses?

Qualifying health expenses includes the following: -

doctors' and consultants' fees
diagnostic procedures carried out on the advice of a practitioner
drugs or medicines prescribed by a doctor, dentist, or consultant
maintenance or treatment in a hospital in connection with the services of a practitioner
diagnostic procedures carried out on the advice of a practitioner
supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner
physiotherapy or similar treatment prescribed by a practitioner
orthoptic or similar treatment prescribed by a practitioner
speech and language therapy carried out by a Speech and Language Therapist for a qualifying person -
note Speech and Language Therapist means an individual approved by the Minister for Health and Children and the claim must relate to a person under 18 year of age or if over 18 the individual must be receiving full-time instruction at any university, college, school or other educational establishment
transport by ambulance
educational psychological assessments for a qualifying person as outlined above for Speech and Language Therapist. Note the Educational Psychologist must be entered on a register maintained by the Minister for Education and Skills
Certain items of expenditure in respect of a child suffering from a serious life threatening illness
kidney patients’ expenses (up to a maximum amount depending on whether the patient uses hospital dialysis, home dialysis or CAPD). See Kidney Patients.
specialised dental treatment
'In vitro' fertilisation.

The following are questions that frequently arise in relation to health expenses claims.
Must the hospital, nursing home, maternity home or other similar institution be approved?

If your claim refers to the year 2009, the hospital, nursing home, maternity home or other similar institution must be approved to qualify. See list of approved hospitals and nursing homes
If the claim relates to the year 2010 and subsequent years the maintenance or treatment expenses incurred must be in association with the services of a practitioner or in connection with diagnostic procedures carried out on the advice of a practitioner. There is no requirement that the institution be entered on the list of approved hospitals and nursing homes for 2010 and subsequent years.

Note: If your claim refers to a hospital or nursing home which does not appear on the list of ‘approved’ institutions, enquiries can be made to your local Revenue office for confirmation as to whether such hospital or nursing home is, in fact, an approved institution for the purposes of tax relief.
What does 'Practitioner' mean?

Practitioner means any person who is:

registered in the register established under section 43 of the Medical Practitioners Act 2007
registered in the register established under section 26 of the Dentists Act 1985
in relation to health care provided outside the State, entitled under the laws of the country in which the care is provided to practice medicine or dentistry there.

Back to Top
Which drugs and medicines can I claim for?

Only the cost of drugs and medicines supplied by a pharmacist, on prescription from a medical practitioner, qualify for relief. (However, see paragraph regarding coeliacs and diabetics).
Which diagnostic procedures carried out on the advice of a practitioner qualify for relief from income tax?

Claims for relief under this heading generally refer to the cost of procedures or treatments carried out by persons who are not qualifying practitioners on patients who are referred for such procedures or treatment by their own doctor. Whilst tax relief may be allowed in respect of procedures or treatments carried out, relief is not due in respect of the cost of drugs, medicines, lotions etc., prescribed by the person providing the treatment.

In the case of a psychologist or psychotherapist, relief can only be allowed where the psychologist or psychotherapist is a qualified practitioner as outlined in paragraph What does Practitioner mean? or where a patient is referred by a psychiatrist for a diagnostic procedure.
Which treatments prescribed by a practitioner qualify for relief from income tax?

Examples of allowable treatments under the heading physiotherapy include treatment by a chiropractor, osteopath and bonesetter. Acupuncture treatment is not allowable unless carried out by a person who is a qualified practitioner as outlined in paragraph What does Practitioner mean?.
I am a coeliac and follow a special diet. Can I claim tax relief on the cost of my food?

Yes. The cost of gluten-free foods manufactured specifically for coeliacs is an allowable expense. A letter from a doctor stating that the individual in respect of whom the claim is made has the condition and that the products are purchased on the advice of the doctor is acceptable. If receipts are requested, in addition to receipts for drugs/medicines, receipts from shops, supermarkets, etc., in respect of gluten-free food products manufactured specifically for coeliac patients are also acceptable.
I am a diabetic and follow a special diet. Can I claim tax relief on the cost of my food?

Yes, if you have been advised by your doctor to purchase "diabetic" products as part of your diet. A letter from a doctor confirming that the individual in respect of whom the claim is made is diabetic and that the products are purchased on the advice of the doctor is acceptable. If receipts are requested, qualifying receipts are not confined to those from a chemist, doctor, etc. - receipts from shops, supermarkets, etc., in respect of food products manufactured specifically for diabetics are also acceptable.

Back to Top
Can I claim for the cost of Educational Psychologists and or Speech and Language Therapists?

Yes, but only in respect of a child who is either under the age of 18 years or if over 18 years is in full-time education. Relief is allowable for the cost of an Educational psychological assessment carried out by an Educational Psychologist and also in respect of Speech and Language Therapy carried out by a qualified Speech and Language Therapist.
Can I claim tax relief on the cost of paying for constant nursing care in the home of a seriously ill person?

Where qualified nurses are engaged on the advice of a medical practitioner to provide constant nursing care in the patient's home, tax relief may be allowed where the following conditions are satisfied:

A medical certificate can (if requested) be provided which –
shows the nature of the patient's illness
states that constant nursing care by fully-qualified nurses in the patient's home is required, and
covers the full period for which home nursing is being claimed
The nurses providing the nursing care are fully qualified and their full names, addresses and qualifications can be supplied, and
Receipts can, if requested, be provided in respect of all payments to the nurses and, where necessary, a breakdown of the payments can be provided. This is to ensure that relief is given only in respect of the amounts paid which directly relate to nursing care and not to the nurses expenses.

Back to Top
I pay for additional nursing care for a patient in a nursing home, can I claim tax relief for this expense?

Where the claim is in respect of a patient in a hospital or nursing home, relief may also be allowed in respect of payments made to qualified nurses to provide additional nursing care over and above that ordinarily provided by the institution if the following conditions are met -

the nurses providing the nursing care are fully qualified and their full names, addresses and qualifications can be supplied
receipts can, if requested, be provided in respect of all payments to the nurses and, where necessary, a breakdown of the payments can be provided. This is to ensure that relief is given only in respect of the amounts paid which directly relate to nursing care and not to the nurses expenses, and
a medical certificate can, if requested, be submitted which –
shows the nature of the patient’s illness
states that constant nursing care over and above that ordinarily provided in the institution is required, indicating the necessity for such additional care and
covers the full period for which additional nursing is being claimed.

Can I claim tax relief on the cost of the supply, maintenance or repair of a surgical, dental or nursing appliance?

Yes, tax relief may be claimed in respect of the costs incurred on the supply, maintenance or repair of appliances where they are used on the advice of a practitioner. Where there is any doubt that the appliance in question is a medical, surgical, dental or nursing appliance, a certificate from a medical practitioner may be requested. The certificate should:

state the nature of the patient's illness,
confirm that the appliance is being used on the advice of the medical practitioner and
outline how the appliance will help to prevent, diagnose, alleviate or treat the ailment, injury, infirmity, defect or disability from which the patient is suffering.

The claim will be considered in the light of the information submitted and relief given where Revenue is satisfied that the appliance may be regarded as a medical, surgical, dental or nursing appliance.

Examples of appliances for which relief is allowable include

Glucometer machine: The cost of the provision of a glucometer machine for a diabetic.
Hearing aid: The cost of the provision of a hearing aid.
Orthopaedic bed or chair: Where the patient is suffering from a specific illness or disability, the cost of the provision of an orthopaedic bed or chair.
Wheelchair or Wheelchair Lift: Expenses incurred in the provision of a wheelchair or wheelchair lift for a disabled person, but not for alteration to the building to facilitate a lift.
Exercise bicycle: Where medical evidence indicates that this is necessary in the circumstances set out in paragraph, 'What is health care?'.
Computer: Where medical evidence is produced that a computer is necessary to alleviate communication problems of a severely handicapped person.
False eye:The cost of a false eye is regarded as an expense incurred on the purchase of a medical appliance.
Wig: Where medical evidence indicates that it is necessary, in the circumstances set out in paragraph, 'What is health care?'.

Examples of Appliances for which relief is not allowable

Car (for disabled person): The cost of the provision of a specially adapted car for a disabled person would not qualify as an appliance, however, see Guide for drivers passengers with disabilities for further information.
Construction Work: The cost of structural alterations or improvements to a private residence to facilitate an incapacitated person.
Telephone: The installation of a telephone, the rental of same or the cost of calls.
Exception
Certain categories of kidney patients, child oncology patients, children with life threatening illnesses and children with permanent disabilities; see paragraph Telephone.

Back to Top
Can I claim for relief on the cost of IVF treatment?

Yes, where the treatment is carried out by a qualifying practitioner. See What does Practitioner mean?
I underwent laser vision correction surgery. Can I claim tax relief on the procedure?

Yes, provided a qualifying practitioner carries out the surgery. See What does Practitioner mean?
I have had surgery to remove a bump on my nose. Can I claim tax relief on the procedure?

Relief is not allowable in respect of cosmetic surgery. However, if you had the operation to correct a breathing difficulty, relief may be allowable provided the surgery was performed in the provision of "health care". (See definition of "health care" in 'What is health care?')
I have had a course of botox injections to reduce the appearance of wrinkle lines on my forehead. Can I claim tax relief on the cost of this treatment?

No. These procedures are cosmetic in nature and do not qualify for relief.
I have a trained guide dog supplied by the Irish Guide Dogs for the Blind. Can I claim Health Expenses in respect of the costs relating to my dog?

Yes. To claim the relief you should submit a letter from Irish Guide Dogs for the Blind confirming that you are a registered guide dog owner. (Irish Guide Dogs for the Blind has been notified of this requirement). Relief is allowed as an annual sum of €825. Following the first claim the amount is included in the annual certificate of tax credits.

Note: Assistance dogs provided to autistic children do not qualify for the relief.
Is tax relief allowed on the cost of travel relating to health issues?

Tax relief may be claimed in respect of the cost of transport by ambulance. Where regular continuing treatment or consultation is required and the patient has to travel long distances, tax relief may be claimed in respect of the cost of travelling other than by ambulance. If a private car is used, the cost of travel is determined at a rate as per kidney patients at kidney patients section. No relief is available for the car parking fees. However, relief will not be granted for minor local travelling expenses or occasional travelling [e.g. to undergo an operation (unless by ambulance)].

In addition to these, please refer to the following paragraphs -

'Can I claim relief on the cost of medical treatment obtained outside the State?'
'My child has a life threatening illness/permanent disability and attends hospital on a regular basis'
'What Health Expenses can Kidney patients claim tax relief for?'.

My child has a life threatening illnes or permanent disability and attends hospital on a regular basis. I have large travel expenses and pay car parking fees, phone and accommodation costs. Can I claim tax relief on any of these expenses?

Apart from normal health related expenditure, tax relief is also available for other expenditure incurred in respect of children with life threatening illnesses (including child oncology patients) and children with permanent disabilities who require constant or regular hospital care. Constant or regular hospital care does not necessarily mean being permanently in hospital. However, it does imply regular hospital attendance or supervision appropriate to the serious illness.

The qualifying items of expenditure are -

Travel

The following qualifies for relief -

the cost incurred in transporting (unlimited journeys) the child and accompanying parents or guardians to and from hospital
the cost incurred by the parents or guardians of the child in visiting the hospital when the child is an 'inpatient' where such trips are shown to be essential to the treatment of the child.

If a private car is used, the cost of travel is determined at a rate as per kidney patients at kidney patients section. No relief is available for car parking fees.

Telephone

Where the child is being treated at home, a flat rate to include telephone rental and calls may be claimed where the expenses are incurred for purposes directly connected with the treatment of the child. The rates are as follows:
2009 €301
2010 €300
2011 €310
2012 €305

Overnight accommodation

Payments made by the parent or guardian to a hospital, hotel or B&B in respect of overnight accommodation in or near the hospital where the child is a patient where such overnight stay is necessary for the treatment of the child.

Hygiene products and special clothing

Relief will be allowed in respect of these items subject to a maximum of €500 per year.

Note: Claims in respect of the cost of minding brothers or sisters of the patient while the parents or guardians attend the hospital are not allowable.

Back to Top
What Health Expenses can Kidney patients claim tax relief for?

Apart from normal health related expenditure, tax relief is also available for the following expenses:

Hospital dialysis patients

The cost of travelling to and from hospital. Where a private car is used, the claimant should specify the number of trips undertaken and the kilometres (or mileage) involved. See paragraph A of section on Kidney Patients for rates.

Home dialysis patients

Relief may be allowed under the following headings and at the rates shown in paragraph B of section on Kidney Patients.

Electricity
Laundry and protective clothing
Telephone
Travelling: Qualifying number of kilometres (mileage) at the appropriate rate per km or mile

Chronic ambulatory peritoneal dialysis (CAPD) patients

Relief may be allowed under the following headings and at the rates shown in paragraph C of section on Kidney Patients.

Electricity
Telephone
Travelling: Qualifying number of kilometres (mileage) at the appropriate rate per km or mile

When making a tax relief claim for health expenses for a kidney patient, claimants should identify the appropriate category. Revenue is aware that it is possible for a patient to move from one category to another, depending on his or her condition. Where a change takes place during the course of a year, relief for each category should be apportioned as appropriate.
Routine Ophthalmic Care

Tax relief is not available for the cost of sight testing or the provision and maintenance of spectacles and contact lenses.

Back to Top
Dental Expenses
Which dental treatment expenses qualify for tax relief?

Relief is available in respect of non-routine dental treatment. Routine dental treatment is not allowable i.e. the extraction, scaling and filling of teeth and the provision and repairing of artificial teeth or dentures. These are excluded from relief even if there is an underlying medical condition that gives rise to the dental treatment or if the treatment in a particular case is considered to be of a non-routine nature.

A treatment for which relief is claimed must be considered in the light of the above.

If, however, the treatment is, for example, of an orthodontic nature, involving the extraction of a tooth as part of that treatment, relief would be allowed for the cost of the orthodontic treatment excluding the cost of the extraction.

An exception to this rule is the cost of the surgical extraction of impacted wisdom teeth carried out either in a hospital or in a dental surgery, which is allowable.
Claims for non-routine dental treatment

An individual claiming relief on Form Med 1 for non-routine dental treatment must hold a Form Med 2 (Dental) which is signed and certified by the dental practitioner. The forms are supplied to dentists through the Irish Dental Association.
Dental Treatments for which Tax Relief is Allowable

Crowns
These are restorations fabricated outside the mouth and are permanently cemented to existing tooth tissue.
Veneers/Rembrandt Type Etched Fillings
These are a form of crown.
Tip Replacing
This is regarded as a crown where a large part of the tooth needs to be replaced and the replacement is made outside the mouth.
Gold Posts/Fibreglass posts
These are inserts in the nerve canal of a tooth, to hold a crown.
Gold Inlays
These are a smaller version of a gold crown. (Only allowable if fabricated outside of the mouth).
Endodontics - Root Canal Treatment
This involves the filling of the nerve canal and not the filling of teeth.
Periodontal Treatment
Root Planing is a treatment of periodontal (gum) disease. Currettage and Debridement is part of root planing. Gum Flaps is a gum treatment. Chrome Cobalt Splint if used in connection with periodontal treatment (if it contains teeth, relief is not allowable). Implants following treatments of periodontal (gum) disease, which included bone grafting and bone augmentation.
Orthodontic Treatment
This involves the provision of braces and similar treatments.
Surgical Extraction of Impacted Wisdom Teeth
The surgical removal of impacted teeth carried out either in a hospital or in a dental surgery is not regarded as 'routine dental treatment' and relief is therefore allowed for the cost of such surgical removals.
Note: An impacted tooth is one which is so firmly lodged in its socket that it cannot emerge through the gum in the normal way. The impaction may be caused by an overlying bone, or because the tooth has grown in such a way that it has become wedged in against another tooth.
Bridgework
Dental treatment consisting of an enamel-retained bridge or a tooth-supported bridge is allowable.

Note: Tax relief is not available for the cost of scaling, extraction and filling of teeth or the provision of artificial teeth or dentures.
Non-routine dental treatment outside the State

Non-routine dental treatment obtained outside the State may be allowed provided the dentist is a qualified practitioner (i.e. entitled under the laws of the country in which the care is provided to practise dentistry there).

A pdfForm Med 2 - Dental Expenses (PDF, 257KB) - Certificate by Dental Practitioner must be completed by the dentist.

Back to Top
Kidney Patients
A. Hospital dialysis patients (where the patient attends hospital for treatment)

Relief in respect of expenditure incurred travelling to and from hospital (unlimited journeys for all years) may be allowed at the following rates -
Mileage/Kilometric Rates 2009 €0.36 per mile or €0.23 per km
2010 €0.27 per mile or €0.17 per km
2011 €0.27 per mile or €0.17 per km
2012 €0.27 per mile or €0.17 per km
B. Home dialysis patients (where the patient uses a dialysis machine at home).

Relief may be allowed in respect of expenditure up to the following amounts –
Reliefs allowed 2009 2010 2011 2012
Electricity €1,665 €1,665 €1,910 €1,935
Laundry & protective clothing €1,940 €1,925 €1,985 €1,960
Telephone €301 €300 €310 €305
Travelling €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km
C. Chronic Ambulatory Peritoneal Dialysis (CAPD) patients (where the patient has treatment at home without the use of a dialysis machine)

Relief may be allowed in respect of expenditure incurred up to the following amounts –
Reliefs allowed 2009 2010 2011 2012
Electricity €1,315 €1,315 €1,508 €1,530
Telephone €301 €300 €310 €305
Travelling €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km €0.27 per mile or €0.17 per km

Note: It is possible for a patient to move from one category to another. Where this happens, relief for each category may be apportioned as appropriate.

Back to Top

Revenue Commissioners

February 2013