New Business & Form 11

[AMKing]

Hi

I am employed as a PAYE worker and my wife has been minding the kids at home for past 8-9 years.

In 2008 she set up a Montessori school from the home and due to the new ECCE childcare scheme, needs to get a tax clearence form and submit Form 11. (Even though it was due Oct 31st - we didn't know until last week)
Income from the Montessori for 08-09 was €15,000. As a start up costs will be more.

As we set up as sole traders & are currently jointly assessed, I have a couple of Q's.

(1) In form 11 submission, I need to include both my own employment and the Montessori income ?
(2) Can we claim for Car as she uses car when purchasing equiptment etc? Is there BIK here?
(3) What way do we allocate for Gas/Lighting/Martgage in terms of tax deductions? I have heard about different amounts of allocation ranging from 1/3 to 1/7 of the annual bill?
(4) Can we claim part of full mortgage as tax deductable or is it just the interest part of it?

thanks in advance

 

[Domo]

1) yes
2) as she is a sole trader no BIK, but she can claim the business % of use of the car based on all the costs.
3) usually expenses based on square footage in use, or any other reasonable method - but whatever method chosen must be used consistently, and be reasonable
4) interest only on the cost of the relevant premises (or proportion)

It is likely that you have made a loss if your expenses are more than the income, and you should therefore ensure that you claim the correct loss reliefs.

You should get professional advice - this is a complex situation.

www.tasingtimes.ie

 

[Graham_07]

In 2008 she set up a Montessori school from the home and due to ....


(4) Can we claim part of full mortgage as tax deductable or is it just the interest part of it?

4) interest only on the cost of the relevant premises (or proportion)

As the business is being run from the home it is possible that all interest is already claimed via TRS. No further claim would be due. However where a designated % is used for business then TRS is not allowable as it is not PPR ( also brings in potential CGT implications on sale ) but that % would be allowable against business profits at marginal rates (which may be greater than 20% on TRS)

As Domo said, this is complex, seek appropriate advice.