Owe tax, can I pay employees PAYE, PRSI only for now

Builderfromhell

I'll try to keep it simple.
I owe revenue VAT, Income Tax, PAYE & PRSI.
We have agreed that I would pay in monthly installments.
I had been doing that but now am no longer able to pay monthly installments.

Can I pay revenue for employers PAYE & PRSI only. I want to do this so that my ex employees can get social welfare payments. If I make a payment to revenue for PAYE & PRSI only could they decide that that has to go to VAT instead.

Business income has ceased and people are not paying monies due hence the predicament. Expect to get paid for one job soon and this money would be available for PAYE & PRSI.

Shane732

I'd approach Revenue and inform them of the situation.

The most likely outcome would be that the installment arrangement is extended and the monthly payments are reduced.

Builderfromhell

Thanks Shane732,
My financial situation is such that my wife's meagre income pays the rent and food.
My financial difficulties stem from clients refusing to pay me money owed.
I don't see much building work on the horizon and so do not see myself having any income to make any payments to revenue. I do, however, want to bring my ex-employees PAYE & PRSi payments up to date as they will otherwise lose out on entitlements

My query is, does anyone know if I can pay PAYE & PRSI due to revenue when other taxes are also outstanding? Or will revenue decide what bill gets paid with my payment?

Shane732

Builderfromhell wrote: »

Thanks Shane732,
My financial situation is such that my wife's meagre income pays the rent and food.
My financial difficulties stem from clients refusing to pay me money owed.
I don't see much building work on the horizon and so do not see myself having any income to make any payments to revenue. I do, however, want to bring my ex-employees PAYE & PRSi payments up to date as they will otherwise lose out on entitlements

My query is, does anyone know if I can pay PAYE & PRSI due to revenue when other taxes are also outstanding? Or will revenue decide what bill gets paid with my payment?

Well technically speaking you can decide what tax it goes against but Revenue have the power to and offset it if they want.

I wouldn't be worried about what tax it's going against - your employee should all still get their benefits.

The main problem for you is that once you breach your installment arrange Revenue will be chasing you again. I've found that they are coming down pretty hard on people who pull out of the installment arrangements. I'd make sure you keep Revenue informed and speak to someone reasonably high in there.

Do you mind me asking if the amount outstanding to Revenue is manageable for you to pay back within the next 12 months.

I appreciate the problem your in.

Builderfromhell

In response to Shanes query, I owe revenue in total about 35,000 euro. We had agreed installments over two years and I had paid a lump sum.
I cannot see how I could possibly re-start monthly payments as I have no income and my wife's income keeps the family going.

I do however, hope to get paid for one small job soon and would like to use that money to bring my ex-employees PAYE & PRSi contributions up to date.

I appreciate your advice regarding the fact that they will recive benefits whether I pay or not but, it is my understanding that they will get more benefits if I can pay as much PRSI as possible. They will have more contributions to their pension and their Dole will last longer. This is why I want to pay their PRSI contributions.

Frank McGivney

If you want to allocate tax payments to a specific tax then the best way of doing so is to register for ROS and that will allow you to specify which tax that the payment goes against. In the payments option in ROS you can select what tax you want to pay and then what period you want to pay.
Once your P35 has gone in then your employees will be okay. From a financial point of view the best taxes to pay are your oldest. This is because any interest that arises is calculated from the date due. So to maximise your own postion I would pay your oldest taxes first.
Also as indicated by other posters if you cant meet your agreement then revenue will possibly come down hard on you.
The best option if you are genuinely not in a position to make the repayments is to go to MABS and ask them to write to revenue with a detailed breakdown of your income an expenditure. I have found the revenue is very receptive to MABS letters.

Builderfromhell

Thanks for that Frank.

I've not used ROS before but I will have a go.