LANDLORDS PAID TAX ON 59% OF RENTAL INCOME IN 2016 - Residential landlords paid tax on just 59% of their rental income in 2016, claiming total deductions of some €1 billion, according to new figures.
This is the first time the Revenue Commissioners have been able to provide such a breakdown on rental income, says the Irish Times. The figures come as Budget 2019 fast-tracked a relief for landlords that will allow those with loans or mortgages on their rental properties to deduct 100% of interest paid on these loans against their tax bills. In 2016, landlords were only able to deduct 75% of interest, with a total deduction of €388m for that year, new Revenue figures show. In 2016, some 193,077 "tax units" - the Revenue counts taxpayers in units, which includes jointly assessed couples - declared gross rental income of some €4.2 billion. This is up by about 5% in value terms on 2015, with almost 10,000 extra taxpayer units declaring this source of income. The figures do not include income earned on a foreign property, or rental income declared on corporation tax returns. This year for the first time, the Revenue has given a separate breakdown on income derived from residential and that derived from commercial. This is as a result of a new question inserted in Form 11 last year, asking landlords for the source of their rental income and the number of properties they let out.
STATE ACCUSES INSURERS OF DODGING €20m - Insurers are deliberately seeking to avoid making back-payments to the Exchequer, the Department of Employment Affairs and Social Protection has said.
The department believes as much as €20m could be owed by the industry to the State. The details are contained in a bond prospectus issued by FBD Insurance, which has told the market it could face a liability of as much as €2m, writes the Irish Independent. The issue relates to a programme called the Recoverable Benefits and Assistance Scheme (RBA). The scheme is designed to allow the State to claim back certain social welfare payments on foot of the welfare recipients getting insurance payments. But an issue has arisen whereby insurers are settling cases outside of court, and then going to court to look for a reduction or elimination of any payments due to the State under the RBA scheme. "The DSP are of the opinion that in many cases the court orders do not reflect an accurate position of the settlement negotiated between the parties and that orders are also being obtained to deliberately avoid an RBA liability," the FBD prospectus states. FBD said the department "believe they have a shortfall of €20m in RBA payments as a result". The insurer said it was difficult to estimate how much exposure it might have if it had to make payments to satisfy the department. But it added that, based on a sampling exercise, the figure could be as high as €2m.
SURGE IN IRISH MONEY TO UK RELATIVES - There has been a huge surge in credit union members sending money to relatives in the UK since the Brexit referendum, according to a report by a foreign exchange specialist.
Data from Fexco Corporate Payments showed an 82% surge in the amount sent to the UK by credit union members, with favourable exchange rates largely behind the spike, says the Irish Examiner. The majority of funds sent has gone to relatives, while tactical transactions to take advantage of the weaker sterling has also increased, it said. Credit unions, as not-for-profit organisations, "offer highly competitive exchange rates" when compared with banks, said Fexco. Its head of dealing, David Lamb, said: "Uncertainty over Ireland’s future relationship with a non-EU Britain remains a worry for the 350,000 Irish citizens living, working, and studying in Britain. But that uncertainty has also dragged down the pound and encouraged more Irish credit union members to send more money to the UK". In the first six months of 2017, credit union members sent 61% more to the UK than during the same period in 2016, prior to the UK's Brexit referendum. The first six months of 2018 rose to 82% above its pre-referendum level, said Fexco.
BANK OF ENGLAND'S ANDY HALDANE POINTS TO 'NEW DAWN' FOR WAGE GROWTH - There is "compelling evidence of a new dawn breaking for pay growth", the Bank of England's chief economist has said.
Andy Haldane, appointed head of the government's new Industrial Strategy Council on Monday, pointed out that private sector pay growth had "hit the psychologically important 3% barrier" in recent months. Mr Haldane's remarks follow one of the worst decades for pay growth in the UK since the Napoleonic wars more than 200 years ago, writes the Financial Times. Average weekly earnings in the UK are still below their 2008 peak after adjusting for the effects of higher consumer prices. But the historical relationship between low unemployment and wage growth was returning as the labour market tightened, he said, and, as the so-called public sector pay cap had been lifted, there were signs of an "upward ratchet in pay". High unemployment following the financial crisis, weak productivity growth and a loss of bargaining power for workers explained Britain's lacklustre pay performance over the past decade, he said. Mr Haldane said the central bank had helped reduce unemployment but there was little it could do to affect productivity growth or a loss of bargaining power among workers, which he blamed on rising automation levels, falling unionisation and less competition between companies.