Income Tax Form Help - Urgent!

niceirishfella

hi,

question and help please -

My wife set up a little sole trader biz last year when she was out of work.
She bought in about 14k in stock and sold 7k i'd say. There 7k in stock left over - but its not resaleable.....inferior and not retail-able.

She's been asked to go back to work for a large co, so she's not persuing her own business anymore and off to work for them.
She registered for income tax last summer when she set up the biz and now she's gotten the tax forms in the post to pay income tax. She wants to DE-Register and settle up.
Whats the best she can do here. What is her tax liabilites. She made no profits, infact lost over 7k i'd say as the stock is non-returnable.

advise me please for her........if you can.

Thanks;)

m83

I'll be the first to admit I'm no expert on this but to the best of my knowledge tax only has to be paid after making ~ €25k from services or ~ €50k from good sold... so I think she isn't required to pay.

I'm sure someone else will clear this up.

mkdon05

m83 wrote: »

I'll be the first to admit I'm no expert on this but to the best of my knowledge tax only has to be paid after making ~ €25k from services or ~ €50k from good sold... so I think she isn't required to pay.

I'm sure someone else will clear this up.

Incorrect information there, i Think your thinking of Vat, not Income Tax.

To OP, she has to make up a set of accounts (just a simple income and expediture will do), then fill out the Form11 and send it in.
On the Form11 she has to include all income for 2007. As she made a loss while trading there will be no tax due.
If your very unsure of the form11, get someone to help you that understands them.

dooloo

it's actually not urgent at all.

By registering for income tax in 2007, she has till 31 October 2009 to file her first tax return but is in her best interest to file it return sooner rather than later.

The loss of c.€7k can be offset against other income and hence she/you should receive a PAYE refund at the marginal rate, depending on whether you are taxed jointly.

Mr. Incognito

By registering for income tax in 2007, she has till 31 October 2009 to file her first tax return but is in her best interest to file it return sooner rather than later.

???

TCA97 S 951. All chargeable persons are required to submit a tax return to te Collector general not later than the 31 October following the year of assessment. Hense for 2007 the due date for the return is October 31 2008.

Now- did your wife inform the Revenue that she wished to be registered for Income tax for 2007? The filing of a Form 11 will register her for income tax. You will need to include an explanatory note that your wife wishes to be de-registered for Income tax for 2008 and will have PAYE income only- this will stop demands for further tax returns to be filed.

So, in order

File a Form 11 including the trading expenses and losses as appropriate on the Form.

Include and explanatory note and once a Notice of Assessment has issued from her local tax office ring the local office and ask to be de-registered for income tax from the 31 December 2007.

Continue on the PAYE system as before.

dooloo

For your information, TCA97 S1084 provides for individuals who commence to carry on a trade or profession. It provides that no surcharge is to be applied where the return (including accounts) for the year of commencement is delivered by the return filing date for the following tax year.

Mr. Incognito

I'll concede that the she can file up to October 2009 without penalty but then again- why bother. If she does file in 2009 Revenue will automatically apply the surcharge and then you will have to lobby to have it removed.

Besides there is no second year of trade to include the commencement year with to which s 1084 (4) applies.

dooloo

SetantaL wrote: »

I'll concede that the she can file up to October 2009 without penalty but then again- why bother. If she does file in 2009 Revenue will automatically apply the surcharge and then you will have to lobby to have it removed.

I did say in my initial post that it was in their best interests to file the return sooner rather than later in order to receive their refund (if applicable).

I was merely making the point that this was not as urgent as the OP thought it was.

Also it can be brought to the Inspector's attention when filing the return that this is a commencement situation and hence the return is not late.

niceirishfella

Hi,

all the posts are of great help........thank you.

also, how does she stand from a VAt perspective, she registered last july and made returns as required on the 7k of stuff she sold etc. To de-reg, what do one do typically?
also, re; the 7k in useless stock - how does the vatman view this?

Thanks again.
NIF.

Mr. Incognito

He doesn't.

You were entitled to an input credit if you were vat registered. If you do not sell on the stock there is no vat to account for as there is no sale on the transaction.

niceirishfella

SetantaL wrote: »

He doesn't.

You were entitled to an input credit if you were vat registered. If you do not sell on the stock there is no vat to account for as there is no sale on the transaction.

what is an Imput Credit? I'm crap at all of this.......sorry.
and what about the VAT claimed back when they were purchased into stock? Does she have to repay this Vat eventhought this stock is now a write off?

Thanks.
NIF>

Mr. Incognito

what about the VAT claimed back when they were purchased into stock

This is an imput credit

Does she have to repay this Vat eventhought this stock is now a write off?

No.

LouOB

Ask your wife if she registered for VAT , you dont have to if you are turning over less than certain amount. Best option is go into tax office with all doc's and ask someone. I doubt very much that you will be charged for anything as 1. there was no money earned 2. if not registered for VAT you should of claimed before now 3. any profit made should of been reflected in Income tax return due in by 31st Oct 2007 for the pervious working year i.e from Jan to Dec 2006. So she will have to file details this Oct for last year.