Archive for March 14, 2014

Home Renovation Incentive scheme

we often get asked about the new Home Renovation scheme. we got this information for revenue today. This Should help answer some of your Questions.

Home Renovation Incentive (HRI)

Introduction

The Home Renovation Incentive was announced by the Minister for Finance in his budget speech on 15th October 2013 as a means of incentivising the construction sector, in particular the smaller contractors. There has been considerable interest in the scheme which has been supported by media advertising by businesses in the construction sector and by various announcements of financial support from banks, credit unions, etc.

What types of work qualify?

The work must be carried out on a person’s main or principal private residence and qualifying works can include extensions, painting and decorating, plumbing, tiling, plastering, supply and fitting of windows, supply and fitting of kitchens, bathroom upgrades, landscaping, etc., which qualify for the rate of 13.5% VAT. The work can be carried out as one job or on a phased basis and it can be carried out by one or more Contractors.

Qualifying contractors

The incentive is designed to support tax compliant contractors who must be registered for VAT. To operate under the Home Renovation Incentive, a compliant contractor is one who qualifies for the 0% or 20% rate of RCT.

The works must cost a minimum of €4,405 (before VAT), which will attract a credit of €595. Where the cost of the works exceeds €30,000, a maximum credit of €4,050 will apply. This translates into a tax credit of between €595 or €4,050, so it’s not going to be a cheque in the post from the revenue. The credit is payable over the two years following the year in which the work is carried out and paid for. 2015 will be the first year for the HRI tax credits.

Example:

If Murphy Larkin Timber Products replaces your Doors,Floors Etc in June 2014 for a cost of €5000 + VAT, we will enter the details to the electronic HRI system.

This will have to be done within 28 days of the work starting. This application form has to include the house owner’s name, assigned ID number, a description of the work, the address, the estimated cost and the anticipated start and finishing dates.

You claim your tax credit in January 2015.

Your tax credit is €5000 x 13.5% = €675

You will receive your tax credit of €337.50 in 2015 and €337.50 in 2016.

 

Input of HRI works and payments to Revenue’s electronic system

All works and payments will have to be registered electronically with Revenue when the electronic HRI system is available in early April. You will need the property ID from the homeowner in order to enter HRI work on the electronic system. The property ID was included on all Local Property Tax letters issued to homeowners by Revenue. If you have not already done so, you might consider obtaining this information from your customers now to avoid delays when the system goes live.

if you have any further questions, please contact us on 051 391821.

www.murphylarkin.com

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