Tax Deadline for Sole Trader who started business in 2006

[suzie]

sole trader trade or professional income is assessed under Schedule D of the tax code not Schedule E as for PAYE income. Therefore a Form 11 is appropriate. If you had self-employed income in 2006 you need to act on filing this ASAP. Paper deadline is 31/10/07 and ROS filing/payment is 15/11/07. Get your accountant onto it immediately. Surcharges apply for late submissions.

SOmetimes income of a minor nature can be dealt with on a Form 12 but while you say it was less than €15,000, I assume it's more than a few hundred. The maximum I've found Revenue accepting on a Form 12 is about €1,500-€2,000 and then where it's largely once off. If your trade is continuous then you need to be filing on Form 11.

Thanks for the response, I'll contact the accountant immediately. Though from reading this thread, is the deadline of 31/10/07 for 2006 return not applicable, i.e. I have in theory until 2008? though in practice wish to keep on top of the returns rather than leave it until later...

 

[Graham_07]

Thanks for the response, I'll contact the accountant immediately. Though from reading this thread, is the deadline of 31/10/07 for 2006 return not applicable, i.e. I have in theory until 2008? though in practice wish to keep on top of the returns rather than leave it until later...

Correct, but you need to make a preliminary tax payment for 2007 by 31/10/07 and the basis of that is either 100% of the final 2006 liability or 90% of the ultimate 2007 liability. As 2007 will not be known with certainty at this point, it's safer to go with 100% of 2006 so you need to know what 2006 is.

 

[jem]

Correct, but you need to make a preliminary tax payment for 2007 by 31/10/07 and the basis of that is either 100% of the final 2006 liability or 90% of the ultimate 2007 liability. As 2007 will not be known with certainty at this point, it's safer to go with 100% of 2006 so you need to know what 2006 is.

Just to clarify this.
IF your self employed income only started in 2006, you do NOT have to pay preliminary tax for 2007 before 31/10/2007. Your first tax payment date is 31/10/2008.

 

[suzie]

Hi Jem,

That is correct, income from my sole trading only came in during 2006, so I guess there is no panic to calculate the preliminary tax for 2007?

So what do I do with the payslip that recently came through the door, return it with zero values and do the 2006 form 11 rather than the form 12 (and yes the sole income was approx 11K for 2006) and get that into the revenue as soon as its ready.
But should I get my tax (PAYE + sole trading during 2006) return in before 31/10/07? what happens if I dont? All very confusing really. Would the completed 2006 form 12 not suffice?

Thanks for your advice

S.

 

[ubiquitous]

I guess there is no panic to calculate the preliminary tax for 2007?

Correct

So what do I do with the payslip that recently came through the door,

return it with zero values

do the 2006 form 11 rather than the form 12 (and yes the sole income was approx 11K for 2006) and get that into the revenue as soon as its ready.

No - this is not technically due for filing until 31/10/08 although it would be good practice to file as soon as you can.

But should I get my tax (PAYE + sole trading during 2006) return in before 31/10/07? what happens if I dont?

Nothing, once you file by 31/10/08

All very confusing really.

If you're confused after discussing this with your accountant, you really need another one.

Would the completed 2006 form 12 not suffice?

Possibly yes, but probably not. In my experience Revenue are now insisting on Form 11 & TR1 registration forms for all taxpayers with self-employment or rental income.

 

[fizzy]

who ever told you this , asuming your info above is correct, is wrong.
get onto self assessment section and tell them the date that you commenced and confirm what I told you is correct.

Sorry to awaken an old thread! I know the 2008 latest return date for people who commenced in 2006 was not in doubt, but since I had posted to say that Revenue had told me otherwise, I wanted to post again in case I had caused any confusion. I had contacted the income tax section again for clarification. This time I used e-mail so I would have something written down. I have only got the response now and they have confirmed the following:

the 2006 Return for self-employed individuals is due by 31/10/07. However, as 2006 was your first year to trade you have until the return filing date for the second year to submit that Return. This means that on 31/10/08 you would be due to file Returns for 2006 and 2007, and pay preliminary tax for 2008.

You will still be due to make a preliminary tax payment for 2007 by the 31/10/07.

 

[suzie]

sole trader trade or professional income is assessed under Schedule D of the tax code not Schedule E as for PAYE income. Therefore a Form 11 is appropriate. If you had self-employed income in 2006 you need to act on filing this ASAP. Paper deadline is 31/10/07 and ROS filing/payment is 15/11/07. Get your accountant onto it immediately. Surcharges apply for late submissions.

SOmetimes income of a minor nature can be dealt with on a Form 12 but while you say it was less than €15,000, I assume it's more than a few hundred. The maximum I've found Revenue accepting on a Form 12 is about €1,500-€2,000 and then where it's largely once off. If your trade is continuous then you need to be filing on Form 11.

Started filling out my return for 2007. During the year I was out of work and signed on getting job seekers benefit. Does this need to be declared on the tax return as income (which is taxable)? and if so under what category (i.e other income?)

Thanks

S.

 

[Graham_07]

Started filling out my return for 2007. During the year I was out of work and signed on getting job seekers benefit. Does this need to be declared on the tax return as income (which is taxable)? and if so under what category (i.e other income?)

Thanks

S.

There is a section for taxable social welfare payments in the section headed "Social Welfare Benefits, pensions or payments". It's line 219 on the paper form. Bear in mind some element of JSB is not taxable (think it's €13 pw and any child element of a payment) so you need the taxable amount. The SW office can give you that.

 

[suzie]

Thanks Graham,

One more question, During 2007 I did VAT returns, off-setting VAT on expenses against VAT on income.

When doing the return do I just fill in the incurred expenses at their net value (i.e minus the VAT).

Thanks

S.

 

[Graham_07]

Thanks Graham,

One more question, During 2007 I did VAT returns, off-setting VAT on expenses against VAT on income.

When doing the return do I just fill in the incurred expenses at their net value (i.e minus the VAT).

Thanks

S.

Yes. A VAT registered trader shows all income & expenses in their Income Tax Returns net of VAT ie minus the VAT already paid or claimed.

 

[suzie]

Yes. A VAT registered trader shows all income & expenses in their Income Tax Returns net of VAT ie minus the VAT already paid or claimed.

Thanks Graham, though I lied about only one more question, cause I've another

I have a personal pension whereby I try to contribute the maximum percentage each year for my age bracket. Now this has been a simple exercise prior to 2007.

My question is if I'm getting taxed on the JSB payments for 2007, do these payments contribute to my overall income and thus affect my level of pension contributes? Or if not I guess I do the calculations without considering the income from JSB?

Thanks

S.

 

[Graham_07]

My question is if I'm getting taxed on the JSB payments for 2007, do these payments contribute to my overall income and thus affect my level of pension contributes? Or if not I guess I do the calculations without considering the income from JSB?

Nope I'm afraid Suzie. JSB is not reckonable income for purposes of the pension % you can get relief on.

 

[suzie]

Nope I'm afraid Suzie. JSB is not reckonable income for purposes of the pension % you can get relief on.

Thanks again for the clarification. Its wasnt a case of me trying to turnover the revenue on the percentage but rather to make sure I got my calculations right on the return..

Cheers

S.