October 31st deadline

amn88

Hi,
I am in business since the begining of sept. 1st sale mid sept. Do i have to file returns for the oct 31st deadline?
I'm a sole trader so is year end in accounting terms the 31st of Oct.?
I have a profit share system in place so technically that person will be entitled to a share of profits at the end of this month for 2010/2011 ?

dbran

Hi

If you commenced business in September 2011 then you will not have any return to make in October 2011 as this return relates to the tax year of 2010.

You do have the option to pay preliminary tax this October for the tax you expect to earn in 2011. Although you do not have to pay preliminary tax it may be worth while doing so if you think that there is going to be cashflow issues when it comes to file your return in October 2011.

Also as it is your first year trading you get an extra year to file your first tax return. So you could stretch it out to October 2012 although again for cashflow purposes this could mean you would have to effectively pay three years of taxes in one go.

Hope this helps

dbran

faceache

Can I ask related question - assuming this is correct and I'm not really doubting you but I was told recently by accountant that I had to do return this year, started in Aug 2010. Anyway if this is correct that means that by Oct 2012 I have to do return for 6 mths of 2010 and full calender year of 2011, is that right? And if it is can I do that return earlier than Oct 2012, for example could I do it in Jan 2012 or is there any advantage to this. I would just like to have it done as soon as possible and be done with it but preferably not within next 2 weeks.

dbran

Hi Faceack

Yes correct. For the first year of trading only, you get an extra 12 months to file the income tax return. No late filing surcharge will be levied on the first years return if you do not file it until 31 October 2012.

However the tax itself is due and although there is no requirement to file the return, technically interest may be levied on the tax that was due to be paid in October 2011 if it is not paid until 31 October 2012. But this interest is not automatically calculated by revenue and is therefore unlikely to be charged. However for this reason and for cashflow reasons it would make sense to file the return earlier.

So your accountant is giving you good advise if he is getting you to file a return in 31 October 2011 rather then leaving everything until next year.

Kind Regards

Dbran

TeddyTedson

31st October 2011?

faceache

Thanks. Don't have accountant, was just talking to one while doing SYOB course and follow up tax course, 2 different accountants and both said different things! The issue of paying the tax and possible surcharges doesn't really bother me as there will be very little to be paid, the prsi & levy mainly, doubt if the 2010 figures will cause any income tax figure. Can I submit the return in Jan 2012 for the 18mths rather than wait until October?

UnawareCaesar

Was onto Revenue today, I started business as a sole trader in Aug 2010 and he said that if I want to I can leave it until October 2012 to file my tax return. Pretty sure I'm not even earning enough to be taxed but want to keep everything above board anyway.