Making Tax returns for Self Employed

ublinia2

What is the procedure for making a tax return if you are self employed - When is the closing date and what and how much of your income can be off set against car , petrol , telephone , esb or anything else.

What could I do to minimise my tax due to the revenue?

kluivert

Prepare a set of accounts or at least an income and expenditure account for the year.

1. Calculate your profit for the year (Income - Expenses)
2. Calculate your taxable profits
3. Complete Form 11
4. Submit to Revenue
5. Pay any liability owed.
6. Pay Preliminary tax on account.

Registering for tax
How do I register for Tax?

You should advise your district office when you start in business. You can do this by filling in one of the following forms:


PREM Reg - Employer (PAYE/PRSI) Tax Registration Form
Registration Form TR1.
These forms are available from any Revenue office, and can be used to register for any or all of the following:

Income Tax
Employer’s PAYE/PRSI
Value Added Tax

When must I make my Tax Return?

Pay and File was introduced in 2002 and brings major advantages and simplifications to the income tax system and streamlines filing and payment obligations for customers and their agents.

The main features in 2005 for self-assessment customers are

31 October 2005

Return filing date for your 2004 tax return
Payment date for the following:
- Preliminary Tax (Income Tax) for 2005
- Balance of tax for 2004
- Capital Gains Tax for the initial period 2005 (1 January 2005 - 30 September 2005)

17 November 2005

Tax Return and payment date for ROS customers who both pay and file on-line.

Taxable Profits

What expenses can I claim for?
You can claim for any business expenses which you have incurred in order to earn your profits. These expenses are normally referred to as revenue expenditure.

Revenue expenditure is your day to day running costs and covers such items as:


Purchase of goods for resale
Wages, rent, rates, repairs, lighting and heating etc.
Running costs of vehicles or machinery used in the business
Accountancy fees
Interest paid on any monies borrowed to finance business expenses/items
Lease payments on vehicles or machinery used in the business
If you are registered for VAT the expenses you claim should be exclusive of VAT.

What expenses can’t I claim for?

The general rule is that you cannot claim for any private expenses i.e.

Any expense, not wholly and exclusively paid for the purposes of the trade or profession
Any private or domestic expenditure e.g. your own wages, food, clothing (except protective clothing), income tax etc.
Business entertainment expenditure i.e. the provision of accommodation, food, drink or any other form of hospitality.
You cannot deduct capital expenditure in calculating your taxable profits, however you can claim what are known as capital allowances on certain expenditure.

What about expenses which are partly for business and partly private?

Where expenditure relates to both business and private use, only that part which relates to your business will be allowed. Examples of such expenditure are rent, electricity, telephone charges etc., where the premises involved is used partly for business and partly for private purposes. These expenses will need to be apportioned to exclude the private use.


Basis of Tax Assessments

Your assessment to tax for any year is normally based on your actual income earned in the tax year i.e. from 1 January to the following 31 December.

If your income consists of profits from a trade, profession or vocation, and your annual accounts are normally made up to a date other than 31 December your assessment will be based on the profits of your accounting year which ends in the tax year.

What accounting date should I use?

It is up to you to decide the date to which you prepare your accounts. You can prepare your accounts from the date your business started to:

The following 31 December (i.e. the end of the tax year)
or

The date which is 12 months after the date on which you started

ublinia2

Say if I buy a computer now which costs a 1000e = 800e plus 200e V.A.T. How much of this can I claim back off the revenue.

If I earn €12,000 self employed and I buy the computer , and I presume that the computer is classified as a captial expenditure , then the Vat on the computer can be only wrote off over a few years - is this correct?

Wear and Tear of Car - how much and how?
Petrol costs - but I dont have any receipts - how much can I claim?

If I am paying back a loan on car at the moment - can i factor this into my expenses?

Use of ESB - I work from home so how much could I account from my ESB bill for work - 50 % etc . - would the revenue query this amount for ESB and how can I account for it.

Is there any book which you could recommend ?

ublinia2

I am not registered for vat at the moment - how much do I need to earn before I register for VAT ?

Is there any advantage in registering for VAT?