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Payroll Taxes

  • 28-04-2009 10:37am
    #1
    Cordner
    Closed Accounts Posts: 33 ✭


    I am meeting with a guy tomorrow to help him with his returns.. he is a decorator & painter- sounds like he hasn't returned anything since he started business in 2006- I know, nightmare but I need the work!

    So he has been paying some family members a wage, he says its approx 300 euro per person for maybe 20 weeks each- so he thinks his only liability to the tax man for this is minimal employers PRSI. He hasn't even registered these people as employees of his business (he is a sole trader).

    So- if these 'employees' are in full time employment elsewhere- then he owes the tax man big- no? Or if they are registered unemployed? I just want to have all my information correct when I meet with him- help!!


Comments

  • #2
    Dan Chipowski
    Closed Accounts Posts: 1,072 ✭✭✭Dan Chipowski


    Well if he's planning on deducting the money he paid them as an expense in the accounts, then they should have been registered, and he should have been deducting paye/prsi etc.

    If they had no employment elsewhere, then it is likely they'd have no liability to Paye/Prsi anyways (Given they are earning 300 quid they are under the threshold for prsi), and assuming the normal tax credits (paye & personal) there would be no tax due on it.

    But if they were in full time employment and utilising the credits/bands elsewhere, then he has a problem should he get an audit. The temptation, depending on the profits he's making would be to treat the cash paid to them as drawings, but this will increase his profits by a good bit.


  • #3
    Cordner
    Closed Accounts Posts: 33 ✭Cordner


    Hi Dan,

    Sorry it took me so long to reply & say thanks. To be honest I decided to pass on the job- he sounded like he was in a bit of a mess to be honest- I then saw he had advertised on another website looking for an accountant to do a days work for €100, and while I do need the money I thought it would probably be a huge headache for very little return. BUT thanks anyway for the quick response.


  • #4
    Dixie Chick
    Registered Users, Registered Users 2 Posts: 1,062 ✭✭✭Dixie Chick


    Good call, some jobs just arent worth the hassle really!


  • #5
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Why would you be taking on the job if you don't know about payroll taxes?

    In short the guy is going to owe backdated PAYE, PRSI, Interest and Penalties.

    Penalties can be avoided in certain circumstances, interest cannot.

    Guys a mess, I wouldn't touch him either.


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