Can not afford my tax bill

S

scubelle

Registered User
Messages
17
Hi All,

I've been self employed since mid 2006, my tax bill for that year was around €2000. However for 2007 & prelim for 2008 the bill is over €10,500. I worked hard and did well in 2007, but only managed to work for 2 months in 2008, my own personal credit crunch !

The thing is I have about €6000 set aside from 2007, but would have to get a loan for the rest. I am now a student for a year so will not be back earning until the end of 2009.

How does this work -

  • Do I have to pay a bill for 2008 which is unrealistic and then next year claim it all back and in the meantime get into horrible debt?
  • Is there a system with the tax office where these situations are taken into consideration?
  • Can I pay half the bill now and then get an adjusted bill in 2009?
Any help, knowledge, advise would be hugely appreciated. I have tried looking on revenue.ie but couldn't find anything.
Very many thanks in advance.
 
Hi Clubman,
I have just sent him an email, but think he wont get back to me till Monday. So wondered if there was a 'known' solution out there or if I should start working out how I can get this extra cash.....
 
Have your tax return processed and when you get your bill contact the Collector Generals office in Limerick and ask them if you could operate an installment arrangement. For future ventures you should maybe set up a direct debit with revenue and pay a fixed amount each month so at year end bill would not be so hard on the pocket.
 
normally prelim tax is 100% of previous years tax. so you pay whatever your total tax bill for 2007 was against your tax for 2008. however if your income has drastically reduced you can pay a lesser amount. talk to your accountant and tell him what you earned in 2008. should reduce amount owed.
 
I have my notice of assessment and will call the Collector Generals Office on monday.

I actually have a savings account that I put a set amount in each month to cover my pension and tax, but since not earning anything from Feb 08 onwards I had to stop putting this aside. But I have to pay a prelim amount for 2008 based on my 2007 earnings, however 2007 and 2008 are very different, which is why I am in this situation.

Thank you for your advise.
 
That sounds great Beckie, that's want I was hoping for. A ray of hope for my week-end.
 
Last edited:
Installment arrngements with the collector general work out more expensive then bank loans. If you go the route try and get a bank loan first.
 
Yes I think so, but not 100% sure, if I can it wont be until next year when I submit my 2008 accounts anyway.
I'm actually applying for a grant which (fingers crossed) will cover my fees anyway.
 

There's not a lot you can do about your 2007 tax liability, that has to be paid. For the 2008 tax year you have the option of paying 100% Preliminary Tax based on the 2007 year, 90% of your estimated 2008 liability or 105% of the pre-preceding year (i.e. 2006) this option must be paid by direct debit installment.

I think your best option would be the 90% option. Work out what you think your 2008 tax liability will be and pay 90% of that liability. I'd recommend you pay more than 90% just to avoid interest and penalties if you get your calculation a bit wrong.

Hope this helps.
 
Thanks Mini, that is hugely helpful, I earned so little in 2008 I think I'll not be too far over the initial tax free amount, so even if I pay them 90% of what I think it will be, I will not have to get a loan etc....
Wow, a huge weight and frown is beginning to lift. Chatting with my accountant on monday will be much less emotional.
Thank you everyone have a good week-end
 
Mini3277 said:
. Work out what you think your 2008 tax liability will be and pay 90% of that liability. I'd recommend you pay more than 90% just to avoid interest and penalties if you get your calculation a bit wrong.
Click to expand...

If you only traded for 2 months of 2008, and will have no taxable income between now and the end of the year, then you should be able to exactly work out what your 2008 liability will be.
 
You must log in or register to reply here.
Menu
Log in
Register