# PAYE Director also registered for income tax



## Palerider (23 Jul 2014)

Am I correct is saying that as a Director of a Ltd Co. paid as a PAYE employee with zero other income from paid employment that Revenue also register that person for income tax, that is what Revenue told me this morning...?


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## Joe_90 (23 Jul 2014)

If you own more than 15% of the share capital in the company in which you are a director you are required to file a Tax return.


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## mandelbrot (23 Jul 2014)

Joe_90 said:


> If you own more than 15% of the share capital in the company in which you are a director you are required to file a Tax return.



+1

And just to add, that applies UNLESS your PAYE income is not from the company you're a director of, AND the company you're a director of is a genuine dormant company.


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## Palerider (24 Jul 2014)

Understand that but not my point, I wasn't aware that Revenue as a  matter of policy open an income tax registration for any proprietory directors, this mean in my case I must submit nil income tax returns as income tax dates fall yet am paid via PAYE only, also means I cannot use the full services of the PAYE anytime service as I now have an income tax registration.


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## Branz (24 Jul 2014)

Palerider said:


> Understand that but not my point, I wasn't aware that Revenue as a  matter of policy open an income tax registration for any proprietary directors, this mean in my case I must submit nil income tax returns as income tax dates fall yet am paid via PAYE only, also means I cannot use the full services of the PAYE anytime service as I now have an income tax registration.



Am surprised that you escaped this long not having to make the Form 11 return on ROS if you are a proprietary director.

I would be keeping the head down...

The ROS system is great, much better that the PAYE online stuff. You can still access it but not input into it: it hold tax credit info going back 4 years

I do see in the 2013 F11 that there is a formal self-assessment page for both income and CGT so less room for error 
There is the option of not signing the self assessment page but it invites them to do it instead

However before leaving, I must say I am puzzled as to how you expect to file a nil income tax return while in receipt of PAYE.

What am I missing here/


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## Palerider (24 Jul 2014)

Ircoha, no need to be surprised, I am a recent proprietary Director.

I am paid via paye, I have no other income so a nil return for income tax would apply as I am paid via paye or am I missing something myself..?


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## Joe_90 (24 Jul 2014)

On your tax return you fill in your income.

The details on your P60 form the basis of your income.

If your employer has operated PAYE correctly then you end up with no liability.

But you still have to file a return.


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## Branz (24 Jul 2014)

Palerider said:


> Ircoha, no need to be surprised, I am a recent proprietary Director.
> 
> I am paid via paye, I have no other income so a nil return for income tax would apply as I am paid via paye or am I missing something myself..?


Joe has answered the question. Its the F11, ideally on ROS
Welcome to the draconian work of a PD.
Dont be late in filing and paying any taxes, including the Property tax or you will get nailed


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## hikicker (25 Jul 2014)

Also be aware that as a proprietary director you are not entitled to the PAYE tax credit. You could (and probably will) have a tax liability when you do your form 11 if you have been claiming this credit through the PAYE system.


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## mandelbrot (25 Jul 2014)

hikicker said:


> Also be aware that as a proprietary director you are not entitled to the PAYE tax credit. You could (and probably will) have a tax liability when you do your form 11 if you have been claiming this credit through the PAYE system.


 
That's not entirely correct - he's not entitled to the PAYE credit on his PAYE income from his directorship, but is entitled to it in respect of any income from any other employment in the same way as any other employee.

OP hasn't clarified whether his PAYE income is from his company, another normal employment, or a combination of both.


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## hikicker (25 Jul 2014)

mandelbrot said:


> That's not entirely correct - he's not entitled to the PAYE credit on his PAYE income from his directorship, but is entitled to it in respect of any income from any other employment in the same way as any other employee.
> 
> OP hasn't clarified whether his PAYE income is from his company, another normal employment, or a combination of both.



I assumed his PAYE income is from his directorship company as he said he had no other income source or employment.


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## mandelbrot (25 Jul 2014)

Palerider said:


> Understand that but not my point, I wasn't aware that Revenue as a matter of policy open an income tax registration for any proprietory directors, this mean in my case I must submit nil income tax returns as income tax dates fall yet am paid via PAYE only, also means I cannot use the full services of the PAYE anytime service as I now have an income tax registration.


 
It's not a matter of Revenue policy so much as a matter of law - the tax legislation sets out who is required to be registered as a chargeable person and obliged to file for Income Tax.

There is a certain logic to it, since people who have an amount of control over a limited company have access to the resources of that company and are therefore seen in a different category than the regular plebs... hence the exemption for people who are directors of genuinely dormant companies.


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## Branz (25 Jul 2014)

mandelbrot said:


> ... hence the exemption for people who are directors of genuinely dormant companies.



Any links on how the dormant state is arrived at and agreed with Revenue please.
Is this tax dormancy or does it have a CRO filing impact as well.
Thanks.


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## mandelbrot (25 Jul 2014)

hikicker said:


> I assumed his PAYE income is from his directorship company as he said he had no other income source or employment.


 
Apologies, you're right, it's pretty clear in the OP!


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## mandelbrot (25 Jul 2014)

mandelbrot said:


> Apologies, you're right, it's pretty clear in the OP!


 
There's an old tax briefing somewhere that has never been superseded, and in fact I think it might even be in the Act...

EDIT: Yep, here it is, see the statement of practice at pages 3/4 which clarify the requirements for the exempt category.
file://userdatadubc05/homedir/bsulli01/Downloads/47-06-03.pdf


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## Branz (25 Jul 2014)

The dormancy test is described in SP-IT/1/93  [ tb36.pdf]
The essence of which is three tests in the context of a 3 year period
www.revenue.ie/en/practitioner/tax-briefing/archive/tb36.pdf


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