Tax saving options for Irish Contractors using PAYE Umbrella and Personal Limited companies

Being a contractor in the Irish market is challenging at the best of times – meeting client company’s requirements / demands as well as managing the relationship with the recruitment agency contractor’s work through, requires time, effort and diplomatic skills! Contractors also have the challenge of working while knowing if they are out sick, on vacation or between contracts they are not earning. Something that should always be borne in mind by contractors and those who interact with them on a professional basis. So, it’s critical that contractors maximise their earning potential – the 1st way to do this is to be as tax efficient as possible. Please find some information that Accounting Pro Ireland has put together to help with this.

Pension

This is an extremely efficient and compliant way to reduce the level of taxation you pay. Contractors using a PAYE Umbrella can avail of the occupational pension scheme – contributions are deducted at source and tax is reduced consequently. If a contractor has a personal limited company, they can setup an executive pension and make very favourable and tax efficient contributions as a result.

Remote workers

Those who qualify are contractors who work remotely or travel as part of their role from their employer’s or registered business premises.

Contractors can claim for hardware that allows remote working – laptops, printers, office equipment etc. and where usage is primarily for business purposes. Also, landline calls that are business related. For domestic heat and lighting, a daily minimum rate of €3.20 per day is claimable (although more can be claimed where expenses can be produced evidencing additional usage).

One4All Vouchers (or equivalent)

A one off €500 voucher can be purchased on an annual basis – always a great option in the run up to Christmas!

Use of a company vehicle where any private use is secondary to the business use, or where the vehicle is not capable of being used as a private vehicle

Commercial vehicles

As a contractor who owns a personal limited company, you may be entitled to purchase a vehicle for the business where its use is primarily for business purposes.

Bike to work scheme

As well as being an extremely healthy way to get to work and a cash saver on your car expenses this is also tax efficient for the busy contractor. A bicycle and related equipment can be purchased up to the value of €1,000 under this scheme. This will reduce both income tax and employers PRSI.

Exam & Course fees

Fees are claimable in certain instances where they relate to the business / profession the contractor operates in.

Mobile phone expenses

Where calls are related to work these can be claimed back against tax.

Membership of relevant professional bodies or periodicals

Where membership is to a body or the publication in question is directly related to your trade or your job.

Accounting Pro Ireland has the knowledge and expertise to assist contractors across Ireland to maximise their earning potential. Let us help you achieve your contracting potential. We offer many add-on and loyalty services such as discounted healthcare, secure and compliant pension advice, and banking assistance. To learn what we can do for you please see https://accounting-pro.ie/ or to learn more about who we are please see https://accounting-pro.ie/about/

About the author: Kevin Deasy