# Tax Deadline for Sole Trader who started business in 2006



## bearaman (27 Sep 2007)

Hi All,
I'm a sole trader who started business in March 2006. I did a tax return with an accountant on March 2007 and this seems to cover me for 2006. I signed up to ROS to do my taxes for 2007. However, when I go to the dropdown menu to choose my tax period, the latest period available is 2006.
Does this mean that I don't have a make a return until Oct 2008? Do I have to pay preliminary tax this year?
Thanks,
Bearaman


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## ButtermilkJa (27 Sep 2007)

The tax return you did with an accountant in March this year should cover your actual tax liability for 2006 (Mar-Dec) and your preliminary tax for 2007 (Jan-Dec). that's all you need to submit before Oct 31st this year.

Next yearthen, you would submit actual tax for 2007 (less preliminary tax already paid) and preliminary tax for 2008.


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## adorado (27 Sep 2007)

ButtermilkJa said:


> The tax return you did with an accountant in March this year should cover your actual tax liability for 2006 (Mar-Dec) and your preliminary tax for 2007 (Jan-Dec). that's all you need to submit before Oct 31st this year.
> 
> Next yearthen, you would submit actual tax for 2007 (less preliminary tax already paid) and preliminary tax for 2008.


 

So, no need to submit this every two months???


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## jem (27 Sep 2007)

Actually due to commencement rules you do not have to submitt your 2006 return until Oct 2008, likewise in October 2008 you will have to pay the following: Actual liability for 2006, actual liability for 2007 and Preliminary tax for 2008. if you wish you can make a payment for pt 2007 in Octomer 07 but you are not obliged to do so.


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## bearaman (28 Sep 2007)

Thanks everybody for your helpful replies.
So, to sum up, I can pay my pt for 2007 this October but I don't have to. I can also wait until Oct 2008 to pay my tax libility for 2007 plus pt for 2008. Hope that correct.
Thanks again.
Bearaman


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## ubiquitous (28 Sep 2007)

adorado said:


> So, no need to submit this every two months???



You are confusing VAT & income tax. If you are confused, then you should get professional assistance to make sure you are properly complying with all your tax obligations.


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## jem (28 Sep 2007)

bearaman said:


> Thanks everybody for your helpful replies.
> So, to sum up, I can pay my pt for 2007 this October but I don't have to. I can also wait until Oct 2008 to pay my tax libility for 2007 plus pt for 2008. Hope that correct.
> Thanks again.
> Bearaman



correct and right . in oct 08 you will also have to pay the tax for 2006.


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## ButtermilkJa (28 Sep 2007)

adorado said:


> So, no need to submit this every two months???


As ubiquitous says, you are confusing this with VAT. Normally VAT returns were due every 2 months. This has now changed (since Sept '07) and returns are now due every 4 months instead. Other options are still available (for example, you can still continue submitting every 2 months if you wish, or annual returns are still allowed) so you should contact an accountant/revenue to clarify what your situation would be.


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## fizzy (28 Sep 2007)

jem said:


> Actually due to commencement rules you do not have to submitt your 2006 return until Oct 2008, likewise in October 2008 you will have to pay the following: Actual liability for 2006, actual liability for 2007 and Preliminary tax for 2008. if you wish you can make a payment for pt 2007 in Octomer 07 but you are not obliged to do so.



Sorry for hijacking this post, it's just I'm in a similar position as I started as a sole trader in September 2006. I got my pay and file 2006 stuff in the post a couple of months back, and I thought that while I did not need to do anything tax wise in the year I started (2006), I thought I had to make a return for 2006 and pay preliminary tax for 2007 before Oct 31st 2007. Can I actually wait another year and only start making returns and paying tax in 2008??


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## jem (28 Sep 2007)

as above yes.


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## fizzy (29 Sep 2007)

thanks jem - that's great. sorry, i know you made this point above, but i just thought it seemed too good to be true when i read it, and that the OP's situation may have been a special case.


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## Beckie (29 Sep 2007)

Just remember that if you dont make a return until October 2008 then you will be hit with a tax bill for 2006 income tax, balance of 2007 Income tax and preliminary tax for 2008.  The amount payable can be a shock if it's left that long.  I'd definitely recommend submitting 2006 now, or, at the very least getting your accountant to calculate tax owed.  Also, it's worth considering paying an amount each month by direct debit rather than facing a big payment in October each year.


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## asdfg (29 Sep 2007)

> Also, it's worth considering paying an amount each month by direct debit rather than facing a big payment in October each year.


 
Or open a good deposit account and lodge a certain amount each month.
Better for you to have the interest rather than the taxman


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## fizzy (29 Sep 2007)

hi beckie,

i'm with you there. i'll definitely make a return for 2006 this year, and i have already done some calculations for 2007 as i thought preliminary tax for this year was definitely due by end of next month. the figure for 2006 even gave me a bit of a shock! it's just interesting to know that i could wait another year if i wanted. 

i think i'll stick to just paying the tax once a year though. losing my paye credit is a big loss, so i may as well use the self employed privilege of hanging onto my cash rather than handing it over every month. i won't earn much interest asdfg but thanks for the deposit a/c tip.

i even got out my revenue leaflets again and still got the impression that you just get let off making a return in your first year of business, but that could be just the examples you use and me needing a clear head!  i'd be lost without these pearls of wisdom from AAM - thanks everyone!


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## fizzy (2 Oct 2007)

I was just onto my local tax office with a few queries about pay and file stuff, and the guy told me that I do have to return for 2006 and pay prelim tax for 07 this year and that I cannot defer anything to 2008?! 

I'm quite confused now. I'm going to try and do everything this year anyway, but it would be good to know for sure how I stand. Does anyone know what Revenue leaflet states that startups can defer returns for 2 years?
Thanks a mill!


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## jem (2 Oct 2007)

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.


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## fizzy (2 Oct 2007)

hi jem,
i was not doubting you. i was onto income tax, dublin south city. that's the number i always ring with queries. i have found it hard to get definitive answers from them sometimes. however, he had even gone off to double check with someone else when i sounded so surprised that i did not have til 08... is there a separate section i should be contacting with pay and file queries? i hope there is - i am always hanging on the income tax line for *ages.


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## jem (2 Oct 2007)

as I say the self assessment section.


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## suzie (4 Oct 2007)

Hi All,

In a similar position, most of the year was taxed under PAYE but the later part of the year registered for income tax as a sole trader. After being directed to the income tax section of my district, they informed me I now need to complete Form 11 rather than the normal Form 12. Is this correct? My accountant implied Form 12 would suffice. Income from trading would have been < 15K for 2006 if that makes any difference.

Thanks

S


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## Graham_07 (4 Oct 2007)

suzie said:


> Hi All,
> 
> In a similar position, most of the year was taxed under PAYE but the later part of the year registered for income tax as a sole trader. After being directed to the income tax section of my district, they informed me I now need to complete Form 11 rather than the normal Form 12. Is this correct? My accountant implied Form 12 would suffice. Income from trading would have been < 15K for 2006 if that makes any difference.
> 
> ...


 
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.


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## suzie (4 Oct 2007)

Graham_07 said:


> 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...


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## Graham_07 (5 Oct 2007)

suzie said:


> 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.


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## jem (5 Oct 2007)

Graham_07 said:


> 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.


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## suzie (5 Oct 2007)

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.


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## ubiquitous (5 Oct 2007)

suzie said:


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


Correct



suzie said:


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


return it with zero values 





suzie said:


> 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.


suzie said:


> 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


suzie said:


> All very confusing really.


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


suzie said:


> 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.


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## fizzy (18 Oct 2007)

jem said:


> 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.


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## suzie (4 Jul 2008)

Graham_07 said:


> 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.


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## Graham_07 (4 Jul 2008)

suzie said:


> 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.


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## suzie (25 Jul 2008)

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.


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## Graham_07 (25 Jul 2008)

suzie said:


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


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.


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## suzie (28 Jul 2008)

Graham_07 said:


> 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.


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## Graham_07 (28 Jul 2008)

suzie said:


> 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.


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## suzie (29 Jul 2008)

Graham_07 said:


> 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.


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