GET AHEAD OF THE FIELD: 2023 TAX DEADLINES AND 2024 CASH PLANNING

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Plan now to minimise your 2022 & 2023 tax bills

By Dave Hickey F.C.A.

It’s Race Week in Galway and, as ever, I was told yesterday: “We won’t feel it now until Christmas”.

While it’s still only early August, there is a lot to be said to looking ahead to the end of 2023 to see what can be done to help minimise personal and business taxes as well as reducing costs for 2024.

Personal & Corporate Tax

There are a plethora of tax deadlines in the last quarter of the year and being aware of them and the opportunities they present can help you reduce your tax burden for 2022 and/or 2023.

You may be aware of some of these milestones and others may be better known to your accountant. Either way you should be aware of the implications of missing a deadline and how it could impact your business or your personal finances.

1. 23 September – Corporation Tax returns for the year ended 31 December 2022. If you are company director, remember that a CT1 must be filed within 9 months of the accounting period end. Check with your accountant that this is done.
2. 31 October – Personal Tax returns for 2022. If you are using Revenue’s Online Service (ROS), this can be extended to 15 November this year.
3. 31 October – Pension Contributions for 2022. You can reduce your 2022 personal tax by making contributions to your pension scheme in respect of that year up to 31 October, slightly later if you’re a ROS user.
4. 15 December – Capital Gains Tax (CGT) payments for 2023. You must pay CGT due on any taxable gains made between 1 January and 30 November this year. This is a fairly tight deadline for gains made late in the period! For taxable gains made in December 2023 the deadline is 31 Jan 2024.
5. 31 December – Capital Acquisitions Tax annual exemption. You are allowed to make a tax-free gift of €3,000 per person each year. While it doesn’t save you tax, it means the recipient doesn’t have to worry about it either, meaning, for example, your family can benefit.
6. 1 January 2024 – Vacant Homes Tax (VHT). The first chargeable period for Vacant Homes Tax (VHT) commenced on 1 November 2022 and will end on 31 October 2023.  Owners of vacant properties within the scope of the VHT charge will be required to self-assess their liability and file a return by 7 November 2023, with payment of the VHT liability due on or before 1 January 2024.
7. Tax Warehousing. You have until 1 May 2024 to agree a Phased Payment Arrangementwith Revenue for all warehoused debt.

Cash Flow and Borrowings

Interest rates around the world have continued to increase with the Euro reaching its highest point since it was established over 20 years ago.

It’s likely that there will be one or two more increases before inflation is deemed under control and analysts predict it will be two to three years before they start to reduce gain.

It’s worth spending time assessing your current financial position and forecasting for the rest of 2023 so that you can make some calls now which could benefit you this year and into the future. For example:

8. Repay Loans If your cash flow allows it, repay whatever loans you can to reduce your interest costs.
9. Convert Overdrafts to Loans Overdraft interest is one of the highest rates you can pay and is almost always variable. Look to negotiate a fixed-term loan to replace this, reducing your costs and giving you more certainty.
10. Purchase Fixed Assets If you have the resources and were planning capital expenditure in 2024, it may be beneficial to bring this forward to this year.
    1. If you’re forecasting taxable profits in 2023, you may benefit from additional capital allowances in the year reducing the tax impact this year.
    2. If you need to borrow to fund the expenditure you may be able to lock in at lower fixed rates now compared to 2024 when rates will continue to increase.

Get professional advice

All of these steps should be second nature to your in-house finance team or your professional adviser. However, it’s always worth having a conversation with them at this time of year as they may not be aware of plans you have which could have a positive impact on your tax and other costs for 2023.

Don’t be a gambler! Reduce the odds by getting professional advice!