Sole Trader to unemployed tax question?

gaatipstr

Hi All, need a bit of help/advice on my situation.

Last May i finished college and got a job straight away in Northern Ireland. The problem was the employer wanted me to work as a sole trader so i invoiced him every 2 weeks. It turned out that because i was been paid from an english account to an irish account i had to pay no tax and was actually paid back VAT from receipts etc.
I finished working up there on the 31st of January. Since then ive had one bit of work that i had to pay VAT on with no problem what so ever.

So heres my problem. Before i start working I used to work weekends for a big enough company an had no tax liability as i was a student. Since I became unemployed i have worked two weekends. First weekend i got taxed just over €6, the second week i got taxed €38. What i dont understand is how am i taxed at 41%? When i was working i was only getting around €450 a week which is roughly €24k a year.

Can anybody tell me if I should of been taxed this much or can I even claim it back? Im hoping to start a job next week that is paid in wages, will I be taxed a bomb on this to?
Thanks

Shane732

gaatipstr wrote: »

Hi All, need a bit of help/advice on my situation.

Last May i finished college and got a job straight away in Northern Ireland. The problem was the employer wanted me to work as a sole trader so i invoiced him every 2 weeks. It turned out that because i was been paid from an english account to an irish account i had to pay no tax and was actually paid back VAT from receipts etc.
I finished working up there on the 31st of January. Since then ive had one bit of work that i had to pay VAT on with no problem what so ever.

So heres my problem. Before i start working I used to work weekends for a big enough company an had no tax liability as i was a student. Since I became unemployed i have worked two weekends. First weekend i got taxed just over €6, the second week i got taxed €38. What i dont understand is how am i taxed at 41%? When i was working i was only getting around €450 a week which is roughly €24k a year.

Can anybody tell me if I should of been taxed this much or can I even claim it back? Im hoping to start a job next week that is paid in wages, will I be taxed a bomb on this to?
Thanks

Ok - there are a number of incorrect statements in your post or at least statements that are very unclear to me.

I don't understand how the fact that you were paid from an UK bank account to an Irish bank accounts would mean that you didn't have to pay tax on your income. Without being smart don't you think everybody would be doing the same if that was the case? Perhaps you were referring to VAT? Have you paid any Income Tax on the income?

In relation to the employment question - I suspect that you may be on emergency tax and therefore you're being subjected to the higher rate of tax. Details of emergency tax here http://www.revenue.ie/en/personal/faqs/tax-credits-emergency-tax.html

gaatipstr

Sorry you are correct, I didnt have to pay any VAT. I paid no income tax - all my business related monies were dealt with by an accountant so everything is up to date as far as im concerned. I wa thinking i was been emergency taxed. If i ring revenue themselves would they tell me everything i need to know and how much tax etc i have to pay and if i can get some of it back?

relax carry on

gaatipstr wrote: »

Sorry you are correct, I didnt have to pay any VAT. I paid no income tax - all my business related monies were dealt with by an accountant so everything is up to date as far as im concerned. I wa thinking i was been emergency taxed. If i ring revenue themselves would they tell me everything i need to know and how much tax etc i have to pay and if i can get some of it back?

Quite simple really; unless you or your new employer tell Revenue that you are now under a new PAYE employment, your new employer must operate the emergency tax basis. This is what an employer must do unless you provide a valid P45 to them.

Once a new tax year starts, (1st of January) any P45s from the prior year(s) are of no use to your new employer. You should hold onto them for your record only. Anyone finding themselves in a position where they do not have a valid P45 or an old P45 should contact Revenue with their own PPS number, the date they started the new job, the employers PAYE registered number (just like a PPS) and how often they are paid. That is all you have to do. Just do it as soon as you start the new job and you are fine.

Also you may wish to de-register from being a sole trader if you have ceased being self employed. Use form TRCN1.

Mr. Incognito

gaatipstr wrote: »

Hi All, need a bit of help/advice on my situation.

Last May i finished college and got a job straight away in Northern Ireland. The problem was the employer wanted me to work as a sole trader so i invoiced him every 2 weeks. It turned out that because i was been paid from an english account to an irish account i had to pay no tax and was actually paid back VAT from receipts etc.

If you were paid from an English bank account and were self employed you have a UK Tax liability and would be oblidged to file UK tax returns. You would also be liable to Irish tax on the income. You would be able to reclaim the UK tax charged on your Irish tax return as the UK would have primary taxing rights. You would have been able to reclaim VAT if VAT registered and self employed



I finished working up there on the 31st of January. Since then ive had one bit of work that i had to pay VAT on with no problem what so ever.

Self employed work I presume? You mean charge VAT on?

So heres my problem. Before i start working I used to work weekends for a big enough company an had no tax liability as i was a student.

This is a common misconception. Students pay tax like everyone else but they usually only start work in the summer so in June they have unused credits from Jan- May which tend to relieve and PAYE tax in the summer time, hense there is a false perception that they are not liable to tax

Since I became unemployed i have worked two weekends. First weekend i got taxed just over €6, the second week i got taxed €38. What i dont understand is how am i taxed at 41%? When i was working i was only getting around €450 a week which is roughly €24k a year.

If you start a new job and provide a PPS number the employer will not charge PAYE for the first month. You were most likely charged the USC. I you provide no PPS number there is emergency tax which is an incrimental increase which gets bigger the longer it is unresolved


Can anybody tell me if I should of been taxed this much or can I even claim it back? Im hoping to start a job next week that is paid in wages, will I be taxed a bomb on this too?
Thanks

You can only claim tax back at the end of the year so for 2012 you are looking at Jan 2013