Self-employed + Form 11

Hi,

Was wondering if anybody could clarify a tax credit situation for me. I'm self-employed since Oct 2010 and I was paying PAYE up until Sep 2010. I haven't sent in the Form 11 as of yet, in the process of doing that now.

What period do I need to account for? In my own accounts I have two separate periods: Oct 2010 - Dec 2010 and Jan 2011 - Dec 2011. The first period has a net loss so no tax is payable but I didn't get to use my tax credit of 1830. Net profit in the second period, but am I able to deduct the tax credit of 1830 and the tax credit for 2011 of 1650?


Thank you.

If you are having a December year end, you could prepare accounts for the 15 months and apportion the profit 3/15 to 2010 and 12/15 to 2011, you will have to include your PAYE income (and PAYE paid) in the 2010 tax return also.

Apologies for some basic queries here but...

I've now done up the accounts for a 15 month period: Oct 2010 - Dec 2011. I've apportioned the net profit amount (after capital allowances have been deducted) to give me a net profit figure for both 2010 and 2011. These figures are just an example:

2010

Net Profit: €5000
Tax at 20%: €1000
Deduct Tax Credit: €1830
Total Tax Payable: -€830


2011

Net Profit: €20000
Tax at 20%: €4000
Deduct Tax Credit: €1650
Total Tax Payable: €2350



Once again, sorry if I'm way off the mark here, but is this anyway near 'right'? What can I do with the -€830? Am I correct in deducting the tax credit for year 2010?

I wouldn't advise preparing 15 month accounts. I think it over complicates things and can cause further complications when you cease trading.

The tax credit is non-refundable, so if you don't use it, you cannot carry it forward and it will be lost.

In 2010 did you not use it against your PAYE income?

smeharg - So you'd advise preparing Oct 2010 - Dec 2010 and then Jan 2011 - Dec 2011?

I probably did use it in 2010, this would be on my P60 for that year, right?

Also, am I able to carry forward any losses for the 3 month period in 2010 and deduct them from my net profit for 2011?


Thanks!

The decision to prepare 15 month accounts depend on your profitability for the period and the salary you were earning until the time you ceased employment.

We have insufficient information here to give an exact answer, smeharg may be right or I maybe.

When filing your 2010 tax return you have to include your paye income for that period, you are taxed on all income in any year.

You may be better off going to an accountant for the first two returns so you can see how it is done and then doing it yourself there-after.

KMJ said:

...Also, am I able to carry forward any losses for the 3 month period in 2010 and deduct them from my net profit for 2011?


Thanks!

Click to expand...

You also have the choice to set them accross to your PAYE income for 2010, reducing your income (and tax for 2010).

smeharg said:

I wouldn't advise preparing 15 month accounts. I think it over complicates things and can cause further complications when you cease trading....

Click to expand...

I'd be interested in hearing why you think that, but its a bit technical for this thread, perhaps you could PM me