# Company Director - No PAYE Tax Credit?



## BobbyFowler (17 Dec 2007)

I've tried searching previous posts but after searching I'm coming up with a blank page.
I'm a director of my own business.  I'm the sole employee.  Is it right that I can't avail of PAYE Tax Credits?  I was going over my figures last night.  I haven't availed of tax credits this year.  I reckon I'm basing that off something I've read.  Is it true that I'm taxed on all income?


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## Satanta (17 Dec 2007)

BobbyFowler said:


> I've tried searching previous posts but after searching I'm coming up with a blank page.


I often have this problem. 
If I enter more than two words or certain two word combinations it will return a blank search.

If you use Google advanced search and enter the domain as www.askaboutmoney.com, with "Only" return results from this domain, it will allow you to do a more comprehensive search of previous threads.


Sorry, no knowledge of the query at hand... just wanted to possibly help with future searches for you/other users.


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## Graham_07 (17 Dec 2007)

See this thread

http://www.askaboutmoney.com/showthread.php?t=69813

A proprietory director ( owing > 15% of issued voting share capital) is not entitled to the employee credit.


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## ClubMan (17 Dec 2007)

Satanta said:


> I often have this problem.
> If I enter more than two words or certain two word combinations it will return a blank search.
> 
> If you use Google advanced search and enter the domain as www.askaboutmoney.com, with "Only" return results from this domain, it will allow you to do a more comprehensive search of previous threads.
> ...


The _vBulletin _search is flakey. Use _Google _instead. See my signature. If you can't see it then adjust your profile settings so that you can.


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## ClubMan (17 Dec 2007)

Graham_07 said:


> See this thread
> 
> http://www.askaboutmoney.com/showthread.php?t=69813
> 
> A proprietory director ( owing > 15% of issued voting share capital) is not entitled to the employee credit.


But he is entitled to personal and other credits and I presume?


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## ClubMan (17 Dec 2007)

BobbyFowler said:


> Is it true that I'm taxed on all income?


Isn't everybody taxed on all income but standard rate bands and tax credits deducted from gross tax to give net tax mean that they don't, say, pay 41% of their gross income etc.?

Do you not have an accountant or payroll specialist to advise you?


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## Graham_07 (17 Dec 2007)

ClubMan said:


> But he is entitled to personal and other credits and I presume?


 

Of course.


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## ClubMan (17 Dec 2007)

Graham_07 said:


> Of course.


Thanks - I get the impression that he doesn't know that hence the question about being taxed on all income.


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## ubiquitous (17 Dec 2007)

If the company has a tax card for the director which is based on nil tax credits for the director, then PAYE must be operated on this basis. It is up to the director to claim refund of any overpayment, when they complete their personal tax return for the year.


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## BobbyFowler (17 Dec 2007)

I have Sage & do all my own accounts over the year.  I've a friend who's an Accountant & I sit down with him to make sure the whole thing balances okay.  That takes half a day.  To be honest, I'm a bit unsure of how I work out my own personal tax situation now.  Am I simply paying 20% on the first 34K & 41% on anything over that?  The way I'm reading it is that because I'm a director with over 15% Shareholding, I can't take advantage of the 1760 Euro Tax Credit.


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## ClubMan (17 Dec 2007)

Did you personally ever receive a statement of tax credits? Did the company ever receive a tax deduction card for you? I would have assumed that these would be necessary to avail of any standard rate band and tax credits?


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## BobbyFowler (17 Dec 2007)

Well I would have got a standard tax card as an employee of the company. According to this I've Tax Credit of 1760 Euro. At the same time, I would have thought that because I'm a Director I can't avail of it?


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## z107 (17 Dec 2007)

There is a PAYE tax credit and a single person tax credit.
You would not be allowed the PAYE tax credit.

Maybe that 1760 is your single person tax credit.
(see post #7 above)


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## BobbyFowler (17 Dec 2007)

Alright
Had a quick look and found my Tax Deduction Cards for the last few years. These have Total Tax Credits of 1500 (going back a few years) up as far as 1760 for this year.  I wasn't aware that there was a Single Person Tax Credit & PAYE Tax Credit - I thought there was just the 1.  I suppose my best bet is to give Revenue a buzz.  With a bit of luck I'll be due a Christmas Windfall as up until now I've paid myself on the basis that I can't use the Tax Credits.


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## ClubMan (17 Dec 2007)

You need to get any claim for backdated credits in before the end of the year otherwise you will miss out on any refund for 2003. You can only backdate such claims by 4 tax years. You should really be getting your accountant to help you out on this or be using a payroll package and being aware of what's on your statement of tax credits.


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## ubiquitous (18 Dec 2007)

BobbyFowler said:


> Alright
> Had a quick look and found my Tax Deduction Cards for the last few years. These have Total Tax Credits of 1500 (going back a few years) up as far as 1760 for this year.  I wasn't aware that there was a Single Person Tax Credit & PAYE Tax Credit - I thought there was just the 1.  I suppose my best bet is to give Revenue a buzz.  With a bit of luck I'll be due a Christmas Windfall as up until now I've paid myself on the basis that I can't use the Tax Credits.



Have you not already filed directors form 11 returns for each year to date?


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## BobbyFowler (18 Dec 2007)

I've actually never heard of a Directors Form 11 & have never submitted one. I use ROS & make sure my PAYE, VAT & Corporation Tax are up to date. It's starting to look a bit shambolic!


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## Iceman732 (18 Dec 2007)

ubiquitous said:


> Have you not already filed directors form 11 returns for each year to date?



I’m not aware of such a thing as a directors form 11. 

Prehaps I can help you. As a propreitory director of an Irish resident company you are obliged to complete a an income tax return on a yearly basis.  The form which you complete the is known as a form 11. 

Providing your only source of income is PAYE from your company then your return will be quite simple. 

I recommend you return this form as soon as possible as it can sometimes hold up certain refunds etc…


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## Joe1234 (18 Dec 2007)

Get the Form 11 for 2006 submitted bfore the end of December or the surcharge rises to 10%.


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## BobbyFowler (19 Dec 2007)

Cheers for that - my only source of income is PAYE from the company - I'll get this sorted out by the weekend.


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## oopsbuddy (19 Dec 2007)

I understand that the PAYE tax credit is not available to company directors, who are paid by their own companies, as they are regarded as self employed. and therefore not entitled to the PAYE credit. However if two such individuals were to come to an arrangement whereby each one's company hired the other individual, and each company paid the other individual a gross salary of approx €4,300 p.a., this would be subject to the PAYE credit, and therefore largely untaxed in the hands of the individual (tweak the numbers to negate the tax to nil). Two things result: first, each individual will now receive more after tax cash from the gross payment because it comes from another company NOT owned by that individual (than if their own company had paid teh same gross amount to them) and secondly, a small employer's PRSI liability will arise, but this is a good thing, because it keeps the Class A contributions going, which provides much better social welfare benefits than Class S, which provides old age pension only.


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## ClubMan (19 Dec 2007)

oopsbuddy said:


> However if two such individuals were to come to an arrangement whereby each one's company hired the other individual


Would they not have to actually do some work for this to be other than a potentially illegal tax avoidance strategy?


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## ubiquitous (19 Dec 2007)

Iceman732 said:


> I’m not aware of such a thing as a directors form 11.
> 
> Prehaps I can help you. As a propreitory director of an Irish resident company you are obliged to complete a an income tax return on a yearly basis.  The form which you complete the is known as a form 11.



Okay then I'll rephrase, "Have you not already filed form 11 returns (as a director) for each year to date?



Iceman732 said:


> I recommend you return this form as soon as possible as it can sometimes hold up certain refunds etc…


The non-filing of Form 11 returns can have more serious implications for directors than  holding up refunds - note the automatic imposition of a 10% surcharge on their entire tax liability (before credit for PAYE paid) which is a lot more harsh than the equivalent surcharge for late filing by self-employed taxpayers, which is calculated as a % of the tax liability after credit for PAYE paid.


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## oopsbuddy (19 Dec 2007)

ClubMan said:


> Would they not have to actually do some work for this to be other than a potentially illegal tax avoidance strategy?



Of course...!


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## capall (19 Dec 2007)

You must have been making a personal tax return each year as a company director
Revenue would have applied the single person tax credit  in their calculations so if you were due anything back you would have got a refund.


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## BobbyFowler (22 Dec 2007)

Called up to Revenue Offices yesterday & have a batch of Form 11's to fill out.  They've given me statements of income & tax paid since 2004. I think it's just this year that I've paid myself without taking tax credits into account.


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## ClubMan (22 Dec 2007)

If it was me I would not be approaching _Revenue _directly about outstanding form filling or liabilities without first getting advice from a tax expert.


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## BobbyFowler (24 Dec 2007)

Have a friend who know's someone in a senior position in Revenue.  Contacted them and they reckon there shouldn't be a problem.


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