DIY tax return

L_Bonn

Do many people do their own sole trader tax returns or do you really need an accountant? I would prefer to do it myself but there might be alot involved.

Ive a very small non vat reg'd business with simple income & expenses with a profit of about 17k.
Is there much work involved in making this tax return. Are there any good online guides?
One question - Ive a car, bought privately which is used maybe 30% for businss. How do I handle expenses for this? Is there a standard mileage allowance or should the costs of the car be factored in?
Also, I have not heard a peep from revenue apart from acknowledgement that I have been registered for tax. Should they have sent me a reminder etc of returns date?

Legend100

What date were you registered from?

L_Bonn

1/1/09.

Legend100

Yeah i thought that might be your start date alright.

You havent received any info from Revenue as you get a years grace in filing your first return. You will need to file your 2009 tax return by 31 October 2011. You will also need file your 2010 tax return by the above date.

on a side not: does anyone know the exact rule for prelim tax in this situation?

Revenue website says you should pay an estimated 90% in October 2009. It says should...not when definitively.

When is prelim payable for a commencement situation? since the return is due in Oct 2011, is prelim payable by 31 October 2010?

L_Bonn

I rang revenue this morning. First person I spoke to said that I needed to return by 0ctober 2011. I thought that couldnt be right and got talking to someone else who said I must pay for 2009 by 31st of October 2010 together with prelim for 2010. This is as I expected.
Surely it cannot be right that I dont make a return til 2011? That would mean I would then have to pay tax for 2009, 2010 & also prelim for 2011?

dbran

L_Bonn wrote: »

I rang revenue this morning. First person I spoke to said that I needed to return by 0ctober 2011. I thought that couldnt be right and got talking to someone else who said I must pay for 2009 by 31st of October 2010 together with prelim for 2010. This is as I expected.
Surely it cannot be right that I dont make a return til 2011? That would mean I would then have to pay tax for 2009, 2010 & also prelim for 2011?

This is correct. If you are entering self assessment for the first time, you are allowed to file your first return at the same time as the second return. The late filing surcharge will not apply to the first return not withstanding that it is filed one year after its due date.

But as you mentioned, you could find yourself with effectively three tax liabilities to pay in 2011.

Also interest will still run on the first years tax return if there is a liability as will any underpaid preliminary tax that you should have paid but did not pay. This interest will be back dated to 31 October 09.

So basically if you think you have a tax liability to pay in October 09 you are best to pay it if you can and not to drag it out for another year.

Hope this helps

dbran

nompere

dbran wrote: »

So basically if you think you have a tax liability to pay in October 09 you are best to pay it if you can and not to drag it out for another year.


dbran

Or at least put the money to pay the tax away somewhere where you can't get at it until this time next year. You might as well earn a bit of interest before handing it over!

L_Bonn

Is this 100% certain - that having registered from 1/1/09 that I am allowed to miss october 09 deadline (for prelim), miss october 2010 deadline for full payment of 09 taxes and prelim for 2010? then pay 2009, 2010 taxes before october 2011 together with prelim for 2011

harry21

I just comlpeted form 11 myself. Started trading same time as L_bonn actually (1/9/09).

I sent off the form and paid up. I did know that you can wait till 2011 to make your first return but I figured why wait, the amount was tiny for me.

But if the tax liability is large, like nompere mentioned, keep it and invest in a one year savings account.

The only other thing I would mention is that you pay preliminary tax but not preliminary PRSI for 2010 if you do pay this deadline. I didn't know that at first so it was a nice little saver for me.

Best of luck!

dbran

harry21 wrote: »

I just comlpeted form 11 myself. Started trading same time as L_bonn actually (1/9/09).

I sent off the form and paid up. I did know that you can wait till 2011 to make your first return but I figured why wait, the amount was tiny for me.

But if the tax liability is large, like nompere mentioned, keep it and invest in a one year savings account.

The only other thing I would mention is that you pay preliminary tax but not preliminary PRSI for 2010 if you do pay this deadline. I didn't know that at first so it was a nice little saver for me.

Best of luck!

Preliminary tax must include PRSI and the relevant amount of Income Levy

dbran

L_Bonn wrote: »

Is this 100% certain - that having registered from 1/1/09 that I am allowed to miss october 09 deadline (for prelim), miss october 2010 deadline for full payment of 09 taxes and prelim for 2010? then pay 2009, 2010 taxes before october 2011 together with prelim for 2011

Yes

The return does not have to be filed until 2011 so there is no late filing surcharge applicable. This is usually the big one because it is levied on the gross tax and not the net balance due after PAYE etc.

But the relevant tax liabilities for each year themselves do have to be paid on those dates so revenue interest will be accruing on the net unpaid tax. So putting it in a bank account could mean you are effectively earning interest on behalf of the revenue (if revenue actually decide to charge you the interest).

There is also the temptation to spend the money in the mean time that cannot be understated.

Regards

dbran

harry21

dbran wrote: »

Preliminary tax must include PRSI and the relevant amount of Income Levy

The nice lady on the phone in my local office told me I didn't have to pay????

Oh well, too late now!!!