P35 returns

My partner and I are directors of a company 50%/50%. last year we paid ourself a salary of 3250 (combined total) a month and we paid the monthly p30. We have now lost a big client and as a result cant afford to pay any money to ourselfs this year until we get up and running again. We are living on our savings. My question is can we reduce our salaries for last year and get a refund back on some of the money we paid the revenue on our p35 return?

Tax is payable on the year in which it was earned, so basically - no. You can submit your 2008 tax return early and claim medical expenses or you may have other deductible income that may result in a tax refund.

Homer

If you haven't submitted the P35 for 2008 yet there may be a way around this. If your directors current accounts were in credit during 2008 you could potentially have withdrawn the net salaries that you took though them. If that is the case you could now revise your salaries through your P35 to a much lower level and reclaim the overpaid PAYE/PRSI paid through P30's in 2008.

Please note if your directors current accounts are not in credit this option is not a runner. Also the Revenue may query the refund in PAYE/PRSI but in my opinion you are doing nothing wrong as you are only reacting to new circumstances in your business.

Hi ya

Thanks for the reply. Yep they directors current accounts are in credit during 2008.

I know that its possible to make these changes if your on the monthly direct debit, wasnt sure if it could be done after the p30's where paid monthly.

thanks for replies

Don't know if this will help but following a meeting with my accountant yesterday I'm claiming subsistence payments for last year that I didn't claim (approx. E140 weekly) that will come back in the form of a refund from revenue and will also result in a tax refund. Don't have the amount yet but reckon I'll be due back c.6k. Make sure you've claimed those subsistence payments that you're entitled to if you work more than 3 miles from home for more than 5 hrs a day. My figures are open to correction but AFAIK are fairly accurate.