While the pandemic has no doubt caused very challenging health and social problems. It has also caused difficult financial circumstances for many. It is what you would characterise as a K shaped recession. In that some sectors are going up while others unfortunately down. In our last recession many industries escaped unscathed but other industries unfortunately suffered. This recession is similar. Many industries are really struggling like hospitality, retail, and tourism. While the technology/online sector is thriving. It is going to be a challenge for many sectors and small businesses in this new world we live. There are however some things we can all do personally to try and get through this downturn as best we can.
1. Staying healthy significantly improves your quality of life but isn’t always easy. Eating the right food often takes a bit more effort and self-control. Getting enough exercise is really important too. Investing in your health is the best financial decision you could make. Explore what works for you be that walking, hurling or swimming and then as Nike say, “Just Do It”.
2. Claim on your medical expenses. Many people are paying large monthly premiums to their Health Insurance providers but are not claiming back on the payments to consultants, physiotherapists etc. that they can claim with their policy. Laya, VHI and Irish Life all have an app which makes this process very easy. Also do not forget to call each of the providers every year to review your plan to make cost savings.
3. There are many allowances that can be claimed by doing a tax return. Medical expenses such as doctors and consultant fees, specialised dental treatment, items or treatments prescribed by a doctor or consultant to name a few. Tax relief on medical and health expenses is given at 20%.
4. Rent a room relief – if you live in an area where there is demand for accommodation such as near a hospital or university you could rent a room in your primary residence up to €14,000 per annum tax free. Until the pandemic is under control people may understandably be slow to avail of this.
5. Help to buy scheme – the help to buy scheme has been extended until 31 December 2021. There is now tax relief available of the lesser of
- €30,000.
- 10% of the purchase price of the new home or completion of a self-build.
- The amount of income tax paid four years prior to making the application.
6. Flat Rate Expenses reduce your taxable income to cover the cost of equipment you need for work. People from upwards of 150 different types of employment such as Teacher’s, Nurse’s and Chef’s can claim this expense. A Nurse for example could claim up to 40% of €733 per year where she is obliged to launder his or her uniform.
7. Claim on your Pension and Income Protection plan, I have met many clients who are paying income protection and pension plans for tears who have not been claiming tax back on these payments. Up to 40% can be claimed back on payments to qualifying policies.
8. Review your existing home, life and car insurance every year. Big savings can often be made on these types of insurance with no reduction in benef it.
9. If you are working f rom home, you may be eligible for tax relief on expenses like light, heat, telephone and broadband. If your employer pays you the allowance you can get up to €3.20 per day without paying any tax, PRSI or USC on it. If your employer does not pay you an allowance you can make a claim for tax relief at the end of the year.
10. If you recently got married make sure to get jointly assessed for tax. A couple who are married and one person is earning more than €35,300 and the other less than €35,300 can earn substantially more at the lower rate of tax by becoming jointly assessed.
Once we can do so I think we should all try and get back to supporting our local shops and businesses. While cost savings are very important, we cannot forget the value of these businesses to our communities.