hello , shame to say i don't know much about tax matters and need some advice here
I've been working & paying my tax via PAYE for the last 5 yrs until 30 June 2007.
After that , i took a few months off (ie between 1 July to 31 Dec 2007) not working.
From 1 Jan 2008, i started doing locum work on & off where i was paid wages without tax reduction and expected to declare myself. my locum work will continue until end July08.
From mid August 08, i'll be employed full time again.
1. someone has told me that i can claim back the tax that i've paid in advance for the period between 1 July to 31 Dec07. is that true? is it too late to claim now? how do i go about that? what form do i need?
2. i haven't declared the tax for money i've earned (as locum) between 1 Jan 08 till now....how should i go about that? again which form do i need? is there a time limit to do this? what consequences are there if i don't declare or do it late?
3. my new employer has asked for my 'tax documents' so i won't be on emergency tax . i have P45 from last employer(dated 30 June 07) and tax credit certificate for year 2007. which one should i hand in? do i need a tx certificate for year 2008? can revenue give to me before i even sort out/declare my tax(refer question 2)
4. someone said if i've been working as locum/self employed from 1 Jan 08 to July 08 my tax credit should/might be higher....not sure what they meant by this. can anyone explain to me please?
Apologies for so many Q ...really appreciate your help & advice. Thanks!!
1. Yes, you are probably entitled to a certain amount of tax back. Ring your local PAYE tax office (check contact locator on www.revenue.ie) and ask for a balancing statement for 2007 to be sent out to you. This should show the refund due to you and hopefully enclose a cheque.
2. You should register for income tax from 1 Jan 2007 using Form TR1 (available from revenue website). You should deregister for income tax from 31 August 2008 by contacting Revenue after you go back in to PAYE employment. You are then obliged to pay preliminary tax (90% of estimated liability) by 31 October next, and file your income tax return for 2008 (Form 11) by 31 October 2009 which will include all your income, including locum income and PAYE income. Not doing any of this can result in penalties and interest on late payments of tax.
3. You can give your new employer your P45 from 2007 but inform them that you have received no PAYE income for 2008 as yet. They can use the details on this to request an up-to-date tax certificate to be sent out. You may pay a small amount of emergency tax while this certificate is being sent out but this will be refunded to you once employer receives the cert.
4. Your tax credits will not be any higher than before, just because you did locum work for the first eight months. However, your tax credits will have built up since January, having not been offset against any PAYE income to date and yes, you will pay reduced tax for a few months, and maybe even the remainder of the year. But this will made up by the fact that you will have a sizable income tax bill to pay.
You don't have to pay preliminary tax for 2007 as it is your first year of self assessment. Preliminary tax is usually based on 100% of the previous years liability (not applicable, or 90% of estimated liability)
You can register for income tax using a TR1 or alternatively you can just download a Form 11 from the Revenue webiste and fill it out and submit it to the collector general- this should automatically register your for Income tax self assessment for that year. The deadline for the submission of the Form 11 for 2007 is the 31 October 2008.
The tax year is jan -december so you'll need to file a form 11 for 2007 (before October 31) and 2008 (for which you'll have to wait till the end of the 2008 year)
You haven't paid any tax in advance for this period. You paid PAYE for Jan- June and then didn't pay any tax. If you had been unemployed for this period you could have used to excess credits from the period June- December to claim a refund for PAYE paid for Jan- June but as you were working you'll just have to do the calculation and work it out.
Form 11- as outlined above.
Give them your P45- your tax credit certificate is not an official document merelya notification of your tax credits to you.
They are talking out their hole. If you pay PAYE income - you have a PAYE credit. Everyone has a personal creidit and other credits are affected by circumstance, eg rent credit if you are paying rent.
Self employed individuals are entitled to deduct expenses relating to the trade but I don't think this will apply to you as you don't really have any expenses your classification just changed from contract of to contrat for services.
thanks dooloo & setantal for your prompt reply, very much appreciated!
i am in a business partnership since SEP 2008 and its nearly time to end of year .I would like your help on few points if possible
1. am i allowed to pay my partner through paye system and not self assesment
2 Can i distribute my profits between partners (2) as i want even if i do pay other partner through paye system.
3 as this is end of my first year trading is it possible to pay tax for the whole year IST SEP TO 30th AUG. is this preliminary tax and finally
4 is employers prsi Class s paid on profits or drawings . Sorry for all questions but i am novice at this and would like get books in some sort order before talk to accountant. your help be greatly appreciated,
Wages taken by partners will be treated as drawings so your partner will be self assessed as you both are self employed not employees.
Do you not have a partnership agreement with the profit sharing ratio already agreed?
Tax & PRSI will be calculated on tax adjusted profits allocated to each partner along with any other income each of you may have.
As it is your first year, commencement rules apply so it won't be a straightforward return. You will need to file a 2008 return for the period sept 08 - 31/12/08 before the 31st Oct 2009 and pay prelim tax for 2009. Your accountant will advise you of this anyway.