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Ive just been doing some research and there's actually a course on taxation for beginners run by the Dublin City Enterprise Board, so I'm going to sign myself up for that. I know all the information is online, but some of it I find hard to digest and I think a class will help me!
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For what its worth, I firmly believe that the best accounts year end date is generally 31 December although others may disagree.
31-Dec may be the simplest year-end but 31-Jan is potentially the most tax-efficient for a sole-trader when it comes to cessation and/or transferring the trade to a limited company.
Posponing the cessation of a sole-trade to shortly after the 31 December can be more tax efficient where the business year end is not 31 December and profits are increasing.
It is the choice of date of cessation that can make a difference not the normal year-end of the business.
If you have a December year-end and choose to cease trading on a 31-Jan then you won't save any tax at all. You would really need to have a 31-Jan y/e for a couple of years for any significant tax saving to be made
eg - if you have a y/e 31-Dec and decide to cease trading on, say 31-Jan-12, then
2009 - taxed on profits y/e 31-Dec-09
2010 - taxed on profits y/e 31-Dec-10
2011 - taxed on 12/13 of profits p/e 31-Jan-12
2012 - taxed on 1/13 of profits p/e 31-Jan-12
so no tax saving here at all
Posponing the cessation of a sole-trade to shortly after the 31 December can be more tax efficient where the business year end is not 31 December
However, if you have a regular y/e of 31-Jan then
2009 - taxed on profits y/e 31-Jan-09
2010 - taxed on profits y/e 31-Jan-10
2011 - taxed on profits y/e 31-Jan-11
2012 - taxed on 1/12 profits y/e 31-Jan-12
so 11/12ths of the profits for the y/e 31-Jan-12 fall out of the tax net
I know that Revenue have the option to review the 2011 year and revise the assessment upward but in practice, the potential extra tax is nothing compared to the tax saving from the 11 mths profits not being taxed
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