Tax Deadline for Sole Trader who started business in 2006

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bearaman

Registered User
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Hi All,
I'm a sole trader who started business in March 2006. I did a tax return with an accountant on March 2007 and this seems to cover me for 2006. I signed up to ROS to do my taxes for 2007. However, when I go to the dropdown menu to choose my tax period, the latest period available is 2006.
Does this mean that I don't have a make a return until Oct 2008? Do I have to pay preliminary tax this year?
Thanks,
Bearaman
 
The tax return you did with an accountant in March this year should cover your actual tax liability for 2006 (Mar-Dec) and your preliminary tax for 2007 (Jan-Dec). that's all you need to submit before Oct 31st this year.

Next yearthen, you would submit actual tax for 2007 (less preliminary tax already paid) and preliminary tax for 2008.
 
ButtermilkJa said:
The tax return you did with an accountant in March this year should cover your actual tax liability for 2006 (Mar-Dec) and your preliminary tax for 2007 (Jan-Dec). that's all you need to submit before Oct 31st this year.

Next yearthen, you would submit actual tax for 2007 (less preliminary tax already paid) and preliminary tax for 2008.
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So, no need to submit this every two months???
 
Actually due to commencement rules you do not have to submitt your 2006 return until Oct 2008, likewise in October 2008 you will have to pay the following: Actual liability for 2006, actual liability for 2007 and Preliminary tax for 2008. if you wish you can make a payment for pt 2007 in Octomer 07 but you are not obliged to do so.
 
Thanks everybody for your helpful replies.
So, to sum up, I can pay my pt for 2007 this October but I don't have to. I can also wait until Oct 2008 to pay my tax libility for 2007 plus pt for 2008. Hope that correct.
Thanks again.
Bearaman
 
adorado said:
So, no need to submit this every two months???
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You are confusing VAT & income tax. If you are confused, then you should get professional assistance to make sure you are properly complying with all your tax obligations.
 
bearaman said:
Thanks everybody for your helpful replies.
So, to sum up, I can pay my pt for 2007 this October but I don't have to. I can also wait until Oct 2008 to pay my tax libility for 2007 plus pt for 2008. Hope that correct.
Thanks again.
Bearaman
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correct and right . in oct 08 you will also have to pay the tax for 2006.
 
adorado said:
So, no need to submit this every two months???
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As ubiquitous says, you are confusing this with VAT. Normally VAT returns were due every 2 months. This has now changed (since Sept '07) and returns are now due every 4 months instead. Other options are still available (for example, you can still continue submitting every 2 months if you wish, or annual returns are still allowed) so you should contact an accountant/revenue to clarify what your situation would be.
 
jem said:
Actually due to commencement rules you do not have to submitt your 2006 return until Oct 2008, likewise in October 2008 you will have to pay the following: Actual liability for 2006, actual liability for 2007 and Preliminary tax for 2008. if you wish you can make a payment for pt 2007 in Octomer 07 but you are not obliged to do so.
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Sorry for hijacking this post, it's just I'm in a similar position as I started as a sole trader in September 2006. I got my pay and file 2006 stuff in the post a couple of months back, and I thought that while I did not need to do anything tax wise in the year I started (2006), I thought I had to make a return for 2006 and pay preliminary tax for 2007 before Oct 31st 2007. Can I actually wait another year and only start making returns and paying tax in 2008??
 
thanks jem - that's great. sorry, i know you made this point above, but i just thought it seemed too good to be true when i read it, and that the OP's situation may have been a special case.
 
Just remember that if you dont make a return until October 2008 then you will be hit with a tax bill for 2006 income tax, balance of 2007 Income tax and preliminary tax for 2008. The amount payable can be a shock if it's left that long. I'd definitely recommend submitting 2006 now, or, at the very least getting your accountant to calculate tax owed. Also, it's worth considering paying an amount each month by direct debit rather than facing a big payment in October each year.
 
Also, it's worth considering paying an amount each month by direct debit rather than facing a big payment in October each year.
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Or open a good deposit account and lodge a certain amount each month.
Better for you to have the interest rather than the taxman
 
hi beckie,

i'm with you there. i'll definitely make a return for 2006 this year, and i have already done some calculations for 2007 as i thought preliminary tax for this year was definitely due by end of next month. the figure for 2006 even gave me a bit of a shock! it's just interesting to know that i could wait another year if i wanted.

i think i'll stick to just paying the tax once a year though. losing my paye credit is a big loss, so i may as well use the self employed privilege of hanging onto my cash rather than handing it over every month. i won't earn much interest asdfg but thanks for the deposit a/c tip.

i even got out my revenue leaflets again and still got the impression that you just get let off making a return in your first year of business, but that could be just the examples you use and me needing a clear head! :) i'd be lost without these pearls of wisdom from AAM - thanks everyone!
 
I was just onto my local tax office with a few queries about pay and file stuff, and the guy told me that I do have to return for 2006 and pay prelim tax for 07 this year and that I cannot defer anything to 2008?!

I'm quite confused now. I'm going to try and do everything this year anyway, but it would be good to know for sure how I stand. Does anyone know what Revenue leaflet states that startups can defer returns for 2 years?
Thanks a mill!
 
who ever told you this , asuming your info above is correct, is wrong.
get onto self assessment section and tell them the date that you commenced and confirm what I told you is correct.
 
hi jem,
i was not doubting you. i was onto income tax, dublin south city. that's the number i always ring with queries. i have found it hard to get definitive answers from them sometimes. however, he had even gone off to double check with someone else when i sounded so surprised that i did not have til 08... is there a separate section i should be contacting with pay and file queries? i hope there is - i am always hanging on the income tax line for *ages.
 
Hi All,

In a similar position, most of the year was taxed under PAYE but the later part of the year registered for income tax as a sole trader. After being directed to the income tax section of my district, they informed me I now need to complete Form 11 rather than the normal Form 12. Is this correct? My accountant implied Form 12 would suffice. Income from trading would have been < 15K for 2006 if that makes any difference.

Thanks

S
 
suzie said:
Hi All,

In a similar position, most of the year was taxed under PAYE but the later part of the year registered for income tax as a sole trader. After being directed to the income tax section of my district, they informed me I now need to complete Form 11 rather than the normal Form 12. Is this correct? My accountant implied Form 12 would suffice. Income from trading would have been < 15K for 2006 if that makes any difference.

Thanks

S
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sole trader trade or professional income is assessed under Schedule D of the tax code not Schedule E as for PAYE income. Therefore a Form 11 is appropriate. If you had self-employed income in 2006 you need to act on filing this ASAP. Paper deadline is 31/10/07 and ROS filing/payment is 15/11/07. Get your accountant onto it immediately. Surcharges apply for late submissions.

SOmetimes income of a minor nature can be dealt with on a Form 12 but while you say it was less than €15,000, I assume it's more than a few hundred. The maximum I've found Revenue accepting on a Form 12 is about €1,500-€2,000 and then where it's largely once off. If your trade is continuous then you need to be filing on Form 11.
 
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