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Revenue Payment

  • 30-08-2010 1:40pm
    #1
    Closed Accounts Posts: 2


    Hi All,
    I started a new business in December last year.Started as a sole trader and things are going fairly well. I have being paying revenue a set amount by direct debit for the last few months but I think I will be approx 7-10k short on what I owe them.
    Just trying to find out what will happen at my year end when I know my liabilities. Does revenue come down like a ton of bricks on you or is it possible to work out a payment plan i.e. pay them 3k and then pay the balance over a few months??

    Anybody got experience with this situation……?


Comments

  • Registered Users, Registered Users 2 Posts: 9,815 ✭✭✭antoinolachtnai


    Are you really making a profit, if you can't pay the tax man. Remember, the tax man has already given you a couple of months of credit.

    You can probably make an arrangement with the revenue, but if your attitude is that you are going to treat them as the lender of first resort, don't expect them to be too impressed.

    You should get advice from an experienced accountant though, rather than relying on advice from the Internets.

    It is good that you are planning for this in advance, but you need to resolve your cashflow problem.


  • Company Representative Posts: 2,957 ✭✭✭Gamesnash.ie: Pat


    I'm not a tax expert by any stretch of the imagination but from my understanding of your post you registered a business in December 2009 - which means your first year ends set of accounts will be due to be compiled in December 2010. What returns are you making at the moment ? - if its VAT or Employers PAYE returns that you have under declared you are in for a hard time. If however you are prepaying off your end of year tax returns you are probably well ahead of the majority of sole traders out there.


  • Closed Accounts Posts: 59 ✭✭Accountancy


    dfwmegan,
    You need to enlighten me a bit.
    What type of tax have you underpaid?
    Also how have you come up with your estimated shortfall?


  • Closed Accounts Posts: 2 dfwmegan


    As my business is seasonal I was paying by DD each month. It is VAT that I have underpaid. I do my own books so looking at what I’ve taken in since December and what I hope to take for the next few months and I have taken into account the payments made already to revenue. The figures I’ve used are just an example. I just wanted to see if the tax man is in any flexible


  • Closed Accounts Posts: 59 ✭✭Accountancy


    No Taxman not flexible.
    You should start doing your VAT Bi-monthly and this will eliminate the problem. As you will pay every two months.
    You can do an online payment to bring up to date the money you own now if you have it.


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  • Registered Users, Registered Users 2 Posts: 2,094 ✭✭✭dbran


    dfwmegan wrote: »
    As my business is seasonal I was paying by DD each month. It is VAT that I have underpaid. I do my own books so looking at what I’ve taken in since December and what I hope to take for the next few months and I have taken into account the payments made already to revenue. The figures I’ve used are just an example. I just wanted to see if the tax man is in any flexible

    Hi Dfwmegan

    Paying VAT by direct debit is usually a good idea as it cuts down on administration, reduces the chances of revenue audit and smooths out cashflow.

    However if it arises that the direct debits are less then 90% of the overall final liability the revenue can levie interest on the underpaid amount which is backdated to the middle of the year ie 6 months.

    I have usually only seen this done in the case of there being a revenue audit and in that case the guy was taking the "Michael" because he was only paying €100 per month and the total liability was nearer to €10000.

    If you think you are underpaying the VAT then get onto revenue and ask them to increase the direct debit. You can reduce the direct debit later on if you need to up to two times in a 12 month period, but you will need to give them an explanation if you are reducing it so think carefully first of all. Is it just a temporary increase in activity or is it more permanent.

    Hope this helps

    dbran


  • Registered Users, Registered Users 2 Posts: 1,091 ✭✭✭BnB


    To answer your question RE revenue being flexible, I can tell you from very recent experience they most certainly are NOT. They are the complete opposite.

    The one thing I would advise you is to keep in communication with them. If you send in your VAT return without payment, enclose a letter proposing when/how you will make payment. They will get back to you (by letter) letting you know if your proposal is acceptable.

    If you have a conversation on the phone with them and you come to any kind of agreement, make sure you follow up the phonecall with a letter. Eventhough they keep a record of phonecalls, they mean nothing unless they have something in writing.


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