Revenue PAYE - advantage/disadvantage in being jointly assessed if both on similar incomes

[Dweller$]

Is there any advantage/disadvantage in being jointly assessed if both on similar incomes?
Thanks

 

[Dweller$]

Hi would anyone have advice on this thanks

 

[RedOnion]

From a tax liability point if view, there's no disadvantage to joint assessment. On a practical level, it means one person has to look after any tax returns for both. Really only a burden if 1 is self employed (or you're not talking to each other!)

The main advantage is if 1 has a drop in income for any reason (e.g illness, taking a career break, etc) then tax credits / bands can be immediately applied to the person with higher income.

 

[Super critical]

We are jointly assessed and both paye however I have now taken over part of the family farm in my name in 2020 (part-time am still working full time in my paye job). So later this year I will be making a tax return for self-employer income, writing off expenses against my tax bill etc. My wife will have no involvement in farming but is the fact we are jointly assessed going to make this messy? My parents always remained separately assessed so always had separate tax returns so I can’t look at their situation for tips.

 

[RedOnion]

My wife will have no involvement in farming but is the fact we are jointly assessed going to make this messy?

No, it's not messy. My understanding is your wife can't claim relief for medical expenses, additional AVCs, etc until you file your tax return.

 

[Super critical]

Thanks, that actually raises questions. I was just pulling together medical receipts and was planning to claim our medial expenses for 2020 in the next few weeks under the normal paye way. Does all this now have to wait and go in on my tax return later this year?

I had it down as separate in my mind but maybe it all has to go in together now. What would happen had I just claimed them now also if I wasn’t supposed to?

Just to add I’ve done nothing to register or alert revenue that I have self employed income in 2020, am I supposed to? My tax return this year was going to be the first time I actually highlighted this? Am I wrong in this?

 

[RedOnion]

I was just pulling together medical receipts and was planning to claim our medial expenses for 2020 in the next few weeks under the normal paye way.

By completing a Form 12? But that's not applicable to you. You're now a chargeable person, so you have to complete a Form 11.
If you used 'the normal PAYE way' you'd be making a false declaration if you didn't include all of your income.

Just to add I’ve done nothing to register or alert revenue that I have self employed income in 2020, am I supposed to?

Yes, you should register as self employed with Revenue.

I'd strongly advise getting a competent accountant to help you.

 

[Super critical]

By completing a Form 12? But that's not applicable to you. You're now a chargeable person, so you have to complete a Form 11.
If you used 'the normal PAYE way' you'd be making a false declaration if you didn't include all of your income.

Yes I that what I was going to do but now that I’m thinking about it even before your reply I would have been completely incorrect as my other income would need to be considered. The other income is very small for now, in fact I wouldn't be surprised to get tax back from my paye tax from farm expenses.

Yes, you should register as self employed with Revenue.

I'd strongly advise getting a competent accountant to help you.

My intention is to engage with the same accountant that already deals with my parents tax returns incl the farm however I didn’t think there was any need until I engage with him later in the year to inform him I want him to do my tax return etc. In other words and especially when it’s only a small side business I didn’t think there was any need to inform revenue and submitting my first tax return would be the point they would be informed? Just to be clear I am still a paye employee as my main income.

 

[RedOnion]

I didn’t think there was any need to inform revenue

Not my area, so I'm open to correction. Farming falls under carrying on a trade. I thought you had to register as self employed.

It'd be no harm to ask the accountant that you're planning to engage, and also get on their schedule. There's no point showing up with a box of receipts in September and expecting them to be able to get your returns done on time.

 

[Super critical]

Not my area, so I'm open to correction. Farming falls under carrying on a trade. I thought you had to register as self employed.

It'd be no harm to ask the accountant that you're planning to engage, and also get on their schedule. There's no point showing up with a box of receipts in September and expecting them to be able to get your returns done on time.

Thanks for the advice I will start to talk with my account sooner rather than later to find out what the best approach is.

Just one other question related to your first response. How are medical expenses etc handled by my wife in this new scenario? Would she still do her expenses through myaccount as before or would I need to submit her expenses along with all my own to the accountant since we are jointly assessed?

 

[Ciru75]

Thanks for the advice I will start to talk with my account sooner rather than later to find out what the best approach is.

Just one other question related to your first response. How are medical expenses etc handled by my wife in this new scenario? Would she still do her expenses through myaccount as before or would I need to submit her expenses along with all my own to the accountant since we are jointly assessed?

You put the whole lot on your tax return.