It’s April and that means tax season for those of us who are sole traders (self-employed) or employees of a company. This usually means that everyone is busy number crunching, tallying and trying to find as many tax deductibles as possible to ensure a tax refund position.
Changes to tax deductibles
When filing for the 2015 income tax year, Barbadians will find that being in a tax refund position is more difficult to achieve. This is as a result of the changes made to what individuals can claim as an income tax deductible. During his budgetary proposal, the Minister of Finance, Rt. Hon. Christopher Snickler stated that individuals can no longer claim the following as income tax deductibles:
- Home allowance which was previously a maximum of $10,000 and
- Planning and savings for retirement savings plan which was previously a maximum of $10,000
The Minister also lowered the income tax rates to 33.5% and 16% in the upper band.
With all the changes that have been made here is a list of the allowances which are still available and should be considered when filing:
- Personal allowance – $25,000 (non-pensioners), $40,000 (pensioners)
- Spousal allowance – $3,000
- Child allowance – $1,000
- Contributions to trade unions and statutory associations
- Donations to charities including the church
- Energy audit retrofits.
- The foreign currency earnings allowance and the foreign tax credit
It should be noted that with the removal of taxable deductions, despite the lowering of the tax rates that both individuals and self-employed persons can expect that their taxable income will increase which will impact the amount of taxes to be paid or refund to be claim for the 2015 income tax year
Rashida Parasram is a freelance accountant and business consultant with MPR Consulting and a business blogger with Feed the Passion. She has a passion for seeing small businesses thrive. She is a member of the Association of Chartered Certified Accountants as well as the Institute of Charactered Accountants of Barbados. She has gained over 10 years experience in the fields of audit and business advisory with the accounting firms of KPMG and Ernst &Young.