Income Tax & Payroll Fundamentals

1. Context and confines of income tax

1.1 Explain the principles of a fair and efficient tax system

1.2 Appreciate the influences and confines which frame the Irish taxation system

1.3 Outline the main sources of tax law

1.4 Outline the structure of the Revenue Commissioners and identify the appropriate contact for given issues

2. Overview of the charge to income tax

2.1 Identify profits or gains which are taxable under Income Tax

2.2 Identify whether or not an individual is tax resident, ordinary resident or domiciled in Ireland

2.3 Outline the territorial scope of Income Tax

2.4 Outline the schedular system for categorising sources of income

2.5 Outline the tax rates, credits and standard rate cut off points

2.6 Complete the relevant returns (Form 11: Paper and ROS)

3. Business profits

3.1 Identify if a sole trader is carrying on business as a trade (Case I) or a profession (Case II)

3.2 Outline the basis of assessment for trading and professional income

3.3 Identify whether or not business expenses are deductible for Income Tax purposes

3.4 Describe relief available for business losses incurred by a sole trader

3.5 Calculate the taxable business profits of a sole trader

4. Business profits – tax depreciation

4.1 Explain what relief, if any, is available for capital expenditure by a business

4.2 Outline the basis period for any relief available on capital expenditure

4.3 List the conditions necessary to claim relief for capital expenditure

4.4 Identify if any relief is available for capital expenditure

4.5 Calculate any relief available for capital expenditure

5. Rental income

5.1 Identify how rental income is taxed

5.2 Identify whether or not expenses are deductible against rental income

5.3 Describe any relief available for rental losses incurred

5.4 Calculate an individual’s taxable rental income

6. Other investment income

6.1 Identify how other investment income is taxed

6.2 Identify the basis of assessment for each type of investment income

6.3 Describe how withholding taxes are dealt with

6.4 Calculate the taxable investment income of an individual including any associated reliefs

7. Employment income

7.1 Identify what employment income is taxable under Schedule E

7.2 Summarise the legal issues around employments

7.3 Compare what is taxable as employment income to the taxation of self-employed individuals

7.4 Outline the basis of assessment for Schedule E

7.5 Identify whether or not expenses are deductible against Schedule E income

7.6 Identify whether or not reimbursed expenses are taxable under Schedule E

7.7 Identify whether or not benefits are taxable under Schedule E

7.8 Calculate an individual’s taxable employment income

8. SRCOP, tax rates, personal tax credits and reliefs

8.1 Identify the rates of tax that will apply to an individual’s income and describe the operation of the Domicile levy

8.2 Identify the tax relief available to an individual for various payments made

8.3 Identify the personal tax credits and reliefs available to an individual by virtue of their personal circumstances

8.4 Describe the key features of the Employment and Investment Incentive Scheme (EIIS)

8.5 Calculate the Income Tax payable by an individual taxpayer

9. Pensions

9.1 Outline the different types of pension

9.2 Describe the tax relief available for pension contributions

9.3 Calculate an individual’s taxable income after deducting pension contributions

10. PRSI & USC

10.1 Describe the operation of the Universal Social Charge (USC)

10.2 Describe the operation of PRSI to self-employed taxpayers

10.3 Describe the operation of PRSI for employed taxpayers

10.4 Calculate a taxpayer’s liability to Universal Social Charge and PRSI

11. Administration – Payroll

11.1 Introduction to PAYE modernisation

11.2 Explain the operation of the PAYE collection system

11.3 Describe how a taxpayer with small amounts of other income can remain solely within the PAYE system

11.4 Describe the obligations of an employer in operating the PAYE system

11.5 Explain the operation of the PAYE collection system

12. Married couples, civil partners and cohabitants

12.1 Outline the basis of assessment options

12.2 Describe the taxation treatment in the year of marriage

12.3 Describe the taxation treatment in the year of death

12.4 Outline the consequences of divorce/civil partnership being legally dissolved

12.5 Describe the taxation of maintenance payments

12.6 Calculate the taxable income of a married couple/civil partners

13. Termination payments

13.1 Outline the items which are commonly seen in a termination payment

13.2 Identify any legal issues surrounding redundancies

13.3 Identify any reliefs from Income Tax available for termination payments

13.4 Calculate the taxable portion of a termination payment

14. Administration – Self-assessment

14.1 Describe the pay-and-file system for Income Tax

14.2 Identify the key pay-and-file dates for Income Tax

14.3 Outline what interest and penalties can apply where pay-and-file dates are missed

15. Local Property Tax (LPT)

15.1 Outline the charge to LPT

15.2 Describe the operation of LPT

16. Analyse and advise on Revenue Powers and Compliance Interventions

16.1 Describe the purpose and operation of the Revenue Compliance Intervention Framework

16.2 Describe the penalty provisions and the action which can be taken to reduce penalties

16.3 Describe what is involved in a Revenue Audit

16.4 Outline key practical rules for the conduct of Revenue Audits

16.5 Explain what records a taxpayer is obliged to retain

16.6 Describe Revenue’s powers

16.7 Apply the Code of Practice to a set of circumstances and advise the taxpayer of their rights and obligations

17. Case study