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Small business tax return

  • 15-11-2011 12:06am
    #1
    JKM
    Registered Users, Registered Users 2 Posts: 171 ✭✭


    I am currently comleting my boyfriends tax return for 2010, leaving it late I know but I have just finished doing my parents with there accountant. I decided for my boyfriends, because it's very low turnover (definately not enough to justify paying an accountant) and not complicated, to use paylesstax.ie. It seems really good so far but I just have a couple of questions that I hope someone can answer.
    My boyfrien officially started trading on 01/07/2010 i.e. that's the date the business registration went through.
    Firstly, he had a few purchases prior to this date, mainly asset purchases. He has in the mean time, in August this year (2011) got a really good job and will as a result be ceasing trading on 31/12/2011. Should I introduce these assets or just ignore them and if I should how do I go about this? I am concerned that if I introduce them I am just going to have to dispose of them anyway at the end of 2011.
    Secondly, he started trading under the 'Back to Work Allowance' from the social welfare. He had been receiving social welfare since before the 01/01/2010. Should this social welfare be entered as taxable income? And if so should the total amount for 2010 be entered. I suspect it should but just want to be sure.

    Thanks so much in advance for any help.


Comments

  • #2
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    JKM wrote: »
    I am currently comleting my boyfriends tax return for 2010, leaving it late I know but I have just finished doing my parents with there accountant. I decided for my boyfriends, because it's very low turnover (definately not enough to justify paying an accountant) and not complicated, to use paylesstax.ie. It seems really good so far but I just have a couple of questions that I hope someone can answer.
    My boyfrien officially started trading on 01/07/2010 i.e. that's the date the business registration went through.
    Firstly, he had a few purchases prior to this date, mainly asset purchases. He has in the mean time, in August this year (2011) got a really good job and will as a result be ceasing trading on 31/12/2011. Should I introduce these assets or just ignore them and if I should how do I go about this? I am concerned that if I introduce them I am just going to have to dispose of them anyway at the end of 2011.
    Secondly, he started trading under the 'Back to Work Allowance' from the social welfare. He had been receiving social welfare since before the 01/01/2010. Should this social welfare be entered as taxable income? And if so should the total amount for 2010 be entered. I suspect it should but just want to be sure.

    Thanks so much in advance for any help.

    Is this the allowance you're talking about? http://www.welfare.ie/EN/Publications/SW92/Pages/1WhatistheBacktoWorkEnterpriseAllowance.aspx
    If so, it's not taxable.

    As for the assets, as you said if you introduce them you'll have to dispose of them and do a balancing allowance / charge calculation. If it were me I'd have a look and see what way it's shaping up without them included, if the turnover / profit was very low, the capital allowances may not be needed...

    (Including them could also give rise to the question as to where he got the money to pay for the purchase of the assets, particularly if he was unemployed for over 12 months prior to commencing...)


  • #3
    JKM
    Registered Users, Registered Users 2 Posts: 171 ✭✭JKM


    Thanks for your reply barneystinson. That is the allowance he is on. So I assume I just leave this completely out of the return?
    That's what I thought with the assets. To be honest it was mostly a case of me leanding him money and my credit card to purchase the equipment to get him started. He only had turnover of little over €7000 in that year so I doubt it would be worth introducing them.
    Thanks for your help.


  • #4
    brosnacat
    Registered Users, Registered Users 2 Posts: 4 ✭brosnacat


    In relation to the social welfare income. You said your boyfriend started on the back to enterprise allowance on 1/7/2010 therefore the social welfare jobseekers benefit/allowance he was receiving up to that point which is taxable should be shown in the "PAYE/BIK/Pensions" section of the form 11. Please ensure that you tick the PAYE tax credit in the "Personal Tax Credit" section so that he will receive his entitled tax credit for the social welfare joseekers income. The balance received as Back to Enterprise allowance from 1/7/2010 can then be shown in the "Exempt Income" section of the Form 11. There should be a blank catch all box at the bottom of this section where you can put in the amount and state the source as DSP Back to Enterprise Allowance.


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