Rental Income 2019 Tax

S

sangilford

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I let out my apartment in February and this is the first time that I have income other than my PAYE employment. The taxable income is greater than the €5,000 Form 12 threshold so I registered for ROS. As the Form 11 relates to the 2018 tax year, do I need to pay tax now before the November 12 deadline on the 2019 income? As I have not been income tax registered previously, there seems to be no option in my ROS account to register the income.
 
No. You need to pay preliminary tax but this is calculated as follows per Revenue site
You must make sure that you do not under pay your preliminary tax, or you may be charged interest. The amount of preliminary tax for a year must be equal to, or more than, the lowest amount of the following:


  • 90% of the tax due for that tax year - you can estimate the tax due based on receipts and expenses Jan-Dec 2019
  • 100% of the tax due for the immediately previous tax year - zero
  • 105% of the tax due for the tax year preceding the immediately previous tax year (often called the ‘pre-preceding year’). This option only applies where you pay by direct debit. It does not apply if the tax due for the pre-preceding year was nil.
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So preliminary tax due is zero but you can pay some if you want :rolleyes:
In 2020, you will have to pay the tax due on 2019 income less preliminary tax paid plus preliminary tax on 2020 income
 
Thanks for the reply. So because it’s based off the lowest figure, which is zero then technically the prelim due now is zero? Unless I want to be extremely generous to the revenue, I can pay the full 2019 tax next year along with the preliminary tax for 2020?
 
sangilford said:
I can pay the full 2019 tax next year along with the preliminary tax for 2020?
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Yes. You can pay it anytime in 2020. The reason people leave it till late in the year, I believe, is in case something happens in the year and their preliminary tax for the current year could go askew due to tenants moving out or unforeseen repairs.
 
sangilford said:
I let out my apartment in February and this is the first time that I have income other than my PAYE employment. The taxable income is greater than the €5,000 Form 12 threshold so I registered for ROS. As the Form 11 relates to the 2018 tax year, do I need to pay tax now before the November 12 deadline on the 2019 income? As I have not been income tax registered previously, there seems to be no option in my ROS account to register the income.
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You didn't ask but heregoes anyways:

- Keep all rental income in one account
- Pay for all repairs from that account, do not use the rent
- Keep all receipts, for absolutely everything, if a tradsman doesn't have a proper receipt get him to write one on the back of an envelope
- Put all paperwork into one binder
- Build up a repair fund in that bank account, for unforseen repairs and tenancy voids. Plus for the tax man.
- If you can't figure out how to do your tax returns next year come back on here with financial details
 
Bronte said:
You didn't ask but heregoes anyways:



- Keep all receipts, for absolutely everything, if a tradsman doesn't have a proper receipt get him to write one on the back of an envelope
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If a tradsman [sic] doesn’t have a “proper receipt” it’s because he/she has done it “off the books” aka “on the black market” aka “cash in hand”, etc, etc. That is, he/she has done the job and gets paid for it, but does not intend to pay tax in that income.
You’ll be charged about half the price for such a job, and you will not get a receipt under any circumstances.
However, as you’ve no receipt you will not be able to deduct it as a liability against your taxes.
 
BTW, unless the rules have changed since I let out my house, any purchases you make or tradesmen expenses you incur prior to receipt of your first rent are not tax deductible.
The expense of getting the gaff ready for renting is solely on your shoulders.
 
Drakon said:
If a tradsman [sic] doesn’t have a “proper receipt” it’s because he/she has done it “off the books” aka “on the black market” aka “cash in hand”, etc, etc. That is, he/she has done the job and gets paid for it, but does not intend to pay tax in that income.
You’ll be charged about half the price for such a job, and you will not get a receipt under any circumstances.
However, as you’ve no receipt you will not be able to deduct it as a liability against your taxes.
Click to expand...

When I had a Revenue audit they initially refused to accept a hand written receipt which I had for an expense. I was able to provide the contractors telephone number and Revenue were satisfied. That was just my experience.

Drakon said:
The expense of getting the gaff ready for renting is solely on your shoulders.
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Rent it first and then get it ready. Thats a thing. Its encouraged, even demanded by the tax regulations.
 
Drakon said:
If a tradsman [sic] doesn’t have a “proper receipt” it’s because he/she has done it “off the books” aka “on the black market” aka “cash in hand”, etc, etc. That is, he/she has done the job and gets paid for it, but does not intend to pay tax in that income.
You’ll be charged about half the price for such a job, and you will not get a receipt under any circumstances.
However, as you’ve no receipt you will not be able to deduct it as a liability against your taxes.
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I don't care if the receipt is on the back of a cornflake box. As long as it has name, property, job, amount date and signature. It is not my responsibility to enquire into the tax status of people who do jobs for me. I get receipts for everything.

And you shouldn't assume that just because you get a nice printed receipt on letterhead that the business you are paying are legit either. The biggest crooks are those who are slick at it.

Last month I had to pay a guy to do fascia and soffet. He was so convoluted he didn't have a bank account. As the figure was large I wanted to do bank transfer, so I had to transfer to a friend of his who had an account with the credit union. Whom I had to ring up to confirm it was him and to confirm that it was not 'his bank account' but the bank account of the credit union (thank heaven's I've a CU account myself so I realised I needed to put the name of the account holder in the bank message. So now for that I have :

a) a receipt
b) a phone number (thanks Creamegg)
c) a name
d) a bank transfer
e) evidence of job done
 
cremeegg said:
When I had a Revenue audit they initially refused to accept a hand written receipt which I had for an expense. I was able to provide the contractors telephone number and Revenue were satisfied. That was just my experience.
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This site is invaluable. I'm now going to put phone numbers etc on my excel ! Thanks.
 
To elaborate, it’s not all about you, Bronte, and what satisfies you.

If you get a receipt written on the back of a corn flakes box and you are happy with it, that doesn’t matter. Revenue has to be happy with it. As indicated by CremeEgg, if they are not initially happy with it they’ll need to trace it back to the source. If the source validates it, then Revenue will be satisfied with your corn flakes box receipt.
Otherwise there wouldn’t be a roll of toilet paper left on the supermarket shelves because every Tom, Dick and Harry up and down the country would be writing a makey-uppy receipt on each piece of toilet paper and submitting it in their annual returns, safe it the knowledge that Revenue would never chase up a suspect looking receipt.

This isn’t the 1930ies, someone needs to stand over the receipt.
 
I’m sure that, ten years ago or whenever it was, when Sean Quinn submitted his tax return and included a receipt for €100,000 for his daughters wedding cake, as a business expense, the receipt was perfectly genuine, on headed paper, etc. Not on the back of a corn flakes box. And likewise the flight receipt of the lady who flew return from NY to County Cavan with the cake.
But Revenue decided that this was not a genuine business expense. Valid receipt or not.

In the end, both the expense and the receipt must be valid.
 
Drakon said:
To elaborate, it’s not all about you, Bronte, and what satisfies you.

If you get a receipt written on the back of a corn flakes box and you are happy with it, that doesn’t matter. Revenue has to be happy with it. As indicated by CremeEgg, if they are not initially happy with it they’ll need to trace it back to the source. If the source validates it, then Revenue will be satisfied with your corn flakes box receipt.
Otherwise there wouldn’t be a roll of toilet paper left on the supermarket shelves because every Tom, Dick and Harry up and down the country would be writing a makey-uppy receipt on each piece of toilet paper and submitting it in their annual returns, safe it the knowledge that Revenue would never chase up a suspect looking receipt.

This isn’t the 1930ies, someone needs to stand over the receipt.
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When Revenue define to all of us what is or is not a receipt then I will comply. A valid receipt as far as I'm concerned is any kind of paper with the work, property, signature, amount and date.

One time I was buying a new letter box for a door, about 30 IEP I think. The girl couldn't give me a receipt because her computer was broken. I asked her for a written receipt. This she told me she could not do. It's called 'computer said no'. Nothing would persuade her. That one I have no receipt for.

You seem to think that just because you have a computer generated lovely looking receipt it's real. It's just as real and valid as one written on a piece of toilet roll holder. Not every tradesman is able to use a computer to generate proper looking receipts. In fact some of the till receipts I have are fading because of the type of paper they are, so on those I use a pen to write in the details.

And yes I do actually have receipts on flimsy piece of paper and envelopes. Not many it has to be said and fewer and fewer. But your local chimney sweep doesn't have a receipt book nor a pen with which to write.
 
Drakon said:
I’m sure that, ten years ago or whenever it was, when Sean Quinn submitted his tax return and included a receipt for €100,000 for his daughters wedding cake, as a business expense, the receipt was perfectly genuine, on headed paper, etc. Not on the back of a corn flakes box. And likewise the flight receipt of the lady who flew return from NY to County Cavan with the cake.
But Revenue decided that this was not a genuine business expense. Valid receipt or not.

In the end, both the expense and the receipt must be valid.
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That does not prove your point. At all. In that case the problem was not the receipt. The problem was the expense. Which was invalid.
 
Bronte said:
In fact some of the till receipts I have are fading because of the type of paper they are, so on those I use a pen to write in the details.
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If it's any help at all - I use an app on my phone "Camscanner" to scan these type of receipts as soon as I receive them and save them in a file on my Dropbox accounts. Actually I do it with all of my rental expense receipts so I have them there in the cloud, ready for my tax return.
 
Nutso said:
If it's any help at all - I use an app on my phone "Camscanner" to scan these type of receipts as soon as I receive them and save them in a file on my Dropbox accounts. Actually I do it with all of my rental expense receipts so I have them there in the cloud, ready for my tax return.
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Yesterday I spent quite some time deleting 2000 emails from my husband's email account. There's thousands more to go. I do not recommend icloud email to anyone. It took me ages to figure out how to select the emails to delete. I have boxes of tax returns/receipts. And I'm relying on no cloud ever to mind them for me. I have a drop box for photos of the dog from the dog minder. That's full for more than a year. I don't have a camscanner, my mobile is full for more than 5 or six years at least. But I'm ready for revenue.

Thank you for the suggestion though. I'm of the floppy disks generation. Now useless. Then there was DVD's, you can't play those anymore and the least scratch and they are defunct. So I'm not trusting no cloud storage. Remember Betamax. I've a few memory sticks. No idea what's on them.

But I did one marvellous thing this summer, I paid one of the children to create a photo book - that's an excellent idea of a Christmas present. Better than millions of pictures stored in places you will never see them.
 
Hi I have a tax question related to this please. I completing a return for my husband for 2018 and got to the part about preliminary for 2019. We were living in the property in 2018 so there is no tax due on it for 2018. We did rent out the property previously and had an accountant doing the returns, however we never had to do preliminary tax returns (my husband said never a word from the accountant on it). Does anyone know why this is?

I ask as we have rented out the property for 2019 so tax will be due and I understand from above that I don't have to pay preliminary tax for 2019 based on 100% of last years tax liability. I'm only wondering is there something I can do do when we are completing the return for next year we're not getting hit with paying the 2019 and the 2020 bill at the one time. Which could be €7 or €8K.

Also I think the advice on having a separate bank account is good and might help us manage this better next year-thanks Bronte
 
Nutso said:
If it's any help at all - I use an app on my phone "Camscanner" to scan these type of receipts as soon as I receive them and save them in a file on my Dropbox accounts. Actually I do it with all of my rental expense receipts so I have them there in the cloud, ready for my tax return.
Click to expand...
I just take a photo of the receipts.
For most of my other expenses I’ve been emailed the receipt. I just file it in the Landlord folder.
 
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