# Corporation tax calculation



## contractor (12 Mar 2010)

I've been sent a letter from the revenue looking for corporation tax due for 1st year of trading (2007).  The company ceased trading at the end of its first year and I have zero money left in the bank.  I'm trying to apply for voluntary strike off, which is probably why this has been flagged as unpaid.  I did have an accountant and I would have thought he had taken care of this for me but he obviously didn't.

Considering I have no money, no accountant, have ceased trading, what are my options here?  Will I have to pay out of my own pocket?  If anyone could also please tell how to calculate the amount due that would also be appreciated.  I will need to keep my costs down so an accountant is out of the question.

Also, is there any exemptions to corporation tax?  I was not a coompany per se.  I was a software contractor and the only reason I was setup as a limited company was because the job agencies will only deal with limited companies.  I know Mr. tax man probably won't care about any sob stories but thought I'd ask.


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## jack2009 (12 Mar 2010)

you were either a company or you were not.

Allthough the company has 'no money' did it make a profit or a loss. If the company suffered a loss who is money owed to. If a profit was made how much.


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## mathepac (12 Mar 2010)

@contractor, it seems like a lot of others, you unfortunately are clueless as to your responsibilities.

It sounds like you somehow managed to register a limited company without knowing (or possibly even caring at the time) how it operated or what the legal, taxation (personal & corporate) requirements were.

How did your company get paid? Who issued the invoices? How did you get paid? Who ran the payroll? Who paid the PAYE and PRSI to the Revenue? Who did the bank reconciliation? What happened to the money (if any) lodged to the company bank account? Are there debtors other than Revenue? Who were your fellow directors? Were there other shareholders? Was the company VAT-registered? etc, etc, etc. You need an accountant to sort this mess out, sooner rather than later, as it'll only get worse.


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## papervalue (12 Mar 2010)

contractor said:


> I've been sent a letter from the revenue looking for corporation tax due for 1st year of trading (2007). The company ceased trading at the end of its first year and I have zero money left in the bank. I'm trying to apply for voluntary strike off, which is probably why this has been flagged as unpaid. I did have an accountant and I would have thought he had taken care of this for me but he obviously didn't.
> 
> Considering I have no money, no accountant, have ceased trading, what are my options here? Will I have to pay out of my own pocket? If anyone could also please tell how to calculate the amount due that would also be appreciated. I will need to keep my costs down so an accountant is out of the question.
> 
> Also, is there any exemptions to corporation tax? I was not a coompany per se. I was a software contractor and the only reason I was setup as a limited company was because the job agencies will only deal with limited companies. I know Mr. tax man probably won't care about any sob stories but thought I'd ask.


 
you would also want to look at cro site to see all outstanding returns and accounts are filed.

if nothing filed, you will have to get accounts audited and pay late fee.

in regard to revenue find out what returns are outstanding. 

I think you will have little choice but to get accountant/auditor to solve it for you

what was your turnover  in 2007,


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## jack2009 (12 Mar 2010)

no point getting auditor involved if op is trying to put the company to be.

Consult an insolvency practioner who can arrange wind the company up in the appropriate mannner.


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## contractor (13 Mar 2010)

@

A simple "no there are no exceptions to corporation tax" would suffice.  I m not clueless, you are jumping the gun assuming my company is in a mess.  It is not.  I did all my returns via an accountant in full, legit and on time with the exception of corporation tax which my accountant has messed up for me, i.e he never filed it.  I am asking for some friendly advice please: how can a get this sorted.  Do I need to pay it out of my own personal money?  The company is finished, no longer trading, no possiblity of getting anymore income to pay for anything including an accountant to sort it out.

Some constructive advice would be appreciated please.

Just to clarify why I thought I might not need to pay it. I was a software contractor.  Every penny minus expenses was my salary.  There was no profits, no losses, just my salary and some very minor expenses.


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## contractor (13 Mar 2010)

@jack2009
Yes I was a company but it is different.  I was a contractor.  I did not have profits and losses, my accountant would process my VAT returns deducting any expenses and the rest was my wages.  PAYE and PRSI have been paid in full (confirmed by the revenue commission to be accurate within 2 cent).

Please don't jump down my throat for this if it is a stupid question, but I have to ask for sake of clarity: Is corporation tax calculated on your profits after wages?  If so then I am correct in saying I owe nothing.


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## papervalue (13 Mar 2010)

contractor said:


> @jack2009
> Yes I was a company but it is different. I was a contractor. I did not have profits and losses, my accountant would process my VAT returns deducting any expenses and the rest was my wages. PAYE and PRSI have been paid in full (confirmed by the revenue commission to be accurate within 2 cent).
> 
> Please don't jump down my throat for this if it is a stupid question, but I have to ask for sake of clarity: Is corporation tax calculated on your profits after wages? If so then I am correct in saying I owe nothing.


 
What you would need is the copy of accounts done for 2007- you would need to put this information on a ct1 form. if cant file online, file manually.

if loss no corp tax due just file ct1- just need form filed on your revenue account to issue letter of no objection

if profit *12.5% and their would be a 10% surcharge for late filing

corp tax is calulated on profit- which is net sales less net expenses wages etc

If you need any help filling in Ct1 or clarification just ask on this forum and I am sure someone will help


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## jack2009 (13 Mar 2010)

as others have suggested check that all forms have been lodged with the compaanies registration office as you will not be able to unless all returns are up to date.

Do you have accouunts that show no profit or loss?  Obviously we have little/no faith in your accountant so would need to  be sure everything done in accordance with your understanding of the situation.


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## contractor (13 Mar 2010)

papervalue said:


> What you would need is the copy of accounts done for 2007- you would need to put this information on a ct1 form. if cant file online, file manually.
> 
> if loss no corp tax due just file ct1- just need form filed on your revenue account to issue letter of no objection
> 
> ...


Thanks PaperValue.  It is clear now from looking at the CT1 form what my situation is.  Wages are deducted from income.  I may need help filling in the CT1 form I'll be sure to pop back on here once I get a copy of my accounts.

Thanks to everyone for your advice.  Just on a side issue though, I always get a lot of hostility when asking tax questions.  OK maybe my questions are stupid but bear in mind not everyone is an accountant.  I would never show such hostility to clients who ask stupid questions about computers and believe me I get a lot of stupid questions, and some from accountants


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## Brendan Burgess (13 Mar 2010)

> I did have an accountant and I would have thought he had taken care of  this for me but he obviously didn't.





> I was not a coompany per se.



There was no hostility other than some which you imagined.

I might not have used the word "clueless", but whatever word I would have used, would have had the same meaning.

Brendan


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## contractor (15 Mar 2010)

Hi Brendan,

I'm not imagining anything its there for all to see.  I would have thought the owner of the website would have more sense than to add such petty comments.

This website is truely an awful place to come for advice.  I know many people who think the same.

Here are the facts for any other contractor out there wondering the same.  You do not have to pay corporation tax, your taxes are paid in full through the PAYE and PRSI system.  This is the advice I was looking for on here, advice I ended up getting elsewhere.

Over and out.


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## jack2009 (15 Mar 2010)

contractor said:


> Hi Brendan,
> 
> I'm not imagining anything its there for all to see.  I would have thought the owner of the website would have more sense than to add such petty comments.
> 
> ...





Is this treu' if so do you know why the revenue are looking forr outstanding corporporation tax return?


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## DB74 (15 Mar 2010)

contractor said:


> Here are the facts for any other contractor out there wondering the same. You do not have to pay corporation tax, your taxes are paid in full through the PAYE and PRSI system.


 
This is incorrect.

Suppose the company made a trading profit of €80K before taking your salary into account and you took a salary of €70K.

The PAYE/PRSI on the salary of €70K should be paid through the PAYE/PRSI system

However this still leaves €10K of profit which is untaxed

This €10K is taxed at the appropriate CT rate (prob 12.5%) so you owe Corpo Tax of €1,250


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## mathepac (15 Mar 2010)

mathepac said:


> ... you unfortunately are clueless as to your responsibilities ...


I apologise for the use of the word "clueless". Words such as "naive" or "uninformed" would conveyed my meaning equally well and might not have proved so contentious.


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## jack2009 (15 Mar 2010)

mathepac said:


> I apologise for the use of the word "clueless". Words such as "naive" or "uninformed" would conveyed my meaning equally well and might not have proved so contentious.


 

Regardless of the word you used it is frustrating hearing directors of companies talk in such a manner.  Granted the OP appears to have no liabilities but the amount of clueless/uniformed/naive directors leaving debt behind them is frustrating and using excuses like "I was only a director in name" etc. as excuses is in my opinion not acceptable.

Also, regardless of leaving debts behind them directors have responsibilities that are all to often ignored/overlooked.


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