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Commencement rule

  • 23-11-2009 2:02pm
    #1
    Registered Users, Registered Users 2 Posts: 6


    Hi I am currently doing a project and need some advice please.

    I need to set up a business at the correct date to minimise my tax liability.
    If I set up on the 31st of December 2009 and give a tax figure for that period to the 1st of January 2010.
    Then begin my accounts from the 1st of January to the 31st of December accounting year end, each year.

    This way I don’t have to apportion my accounts in my second year for the taxpayer’s option.
    Is this the best way to reduce my liability or does it affect it at all.

    Thanks


Comments

  • Closed Accounts Posts: 160 ✭✭mickbyrne


    The best year ends for a sole trader/partnership are from Jan to May. This gives much better scope for tax planning in future years. For example, you can draft your March 2009 accounts. In July 2010 you could also draft your March 2010 accounts. At this stage you still have not filed your Income tax return for the March 2009 y/e as you have until 31/10/2010. Based on the outcome of the 2010 accounts you may revised some assumptions made on March 2009 which didn't turn out as expeced. You can use this to maximise tax bands and credits. It also means you know exactly how much preliminary tax you need to pay.


  • Registered Users, Registered Users 2 Posts: 6 dlocko


    Thanks for your reply mick very helpfull.


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