Received notice of assessment, is this correct?

augusta24

Hi everyone,

I just received my notice of assessment which states that I owe €730.04 tax.

Now of course I've no problem paying this, its just that when I was working out what I thought I would have to pay my figures were much less than this, so I was hoping to see what others thought about this here. Obviously I'm more than likely wrong and in which case then its grand I'll pay it, but I would be much more comfortable paying it if somebody could explain to me where it is I was wrong in my calculations.

I was self employed for 2011, no outgoings/expenses at all. I earned €9154.

My notice of assessment states that I owe:

Income tax @ 20% : €1830.80
- personal tax credit -€1650
€180.80

PRSI (self) @ 4% : €366.16
USC (self) @ 2% : €183.08

Total payable: €730.04


Now, what I can't understand is that when I was looking at the revenue website and working out taxes, I didn't realise I would have to pay this 20% rate. I thought that was PAYE ?

I'm sure this is accurate, but I would be more comfortable if someone could point me in the direction where I could see this in writing and understand it some more.

Many thanks.

Citizenpain

Tax Rates and bands are here

http://www.revenue.ie/en/tax/it/leaflets/it1.html#section3

USC is here

http://www.revenue.ie/en/tax/usc/index.html

smcgiff

There were no allowable expenses? Can you say what you work at?

augusta24

Thanks for that, but I interpret that since I am under the €18000 limit that I am exempt from this tax. Am I incorrect ?

augusta24

Was a home tutor, just worked in a child's home. They provided all resources etc. so I didn't have to buy any. The only possible expense I could think of would be petrol driving to work, but I worked 3 days a week and drove less than 5 miles in and out of work and just felt that since I couldn't afford a solicitor to do my taxes that it would be just simpler to not try claim expenses.

smcgiff

augusta24 wrote: »

Thanks for that, but I interpret that since I am under the €18000 limit that I am exempt from this tax. Am I incorrect ?

Who was that response meant for - the more information you give the more help you will get.

augusta24

smcgiff wrote: »

Who was that response meant for - the more information you give the more help you will get.

Apologies, I hit the wrong button, meant to include quotes.

From the link regarding the tax bands I interpret that I am exempt as I'm under €18000, does this not count for those in self employment perhaps?

smcgiff

Did you have any of the following...

Private refuse charges
Medical expenses such as doctors fees
Education expenses (some of which qualify)

Citizenpain

augusta24 wrote: »

Thanks for that, but I interpret that since I am under the €18000 limit that I am exempt from this tax. Am I incorrect ?

Applies if you were >65

smcgiff

augusta24 wrote: »

Apologies, I hit the wrong button, meant to include quotes.

From the link regarding the tax bands I interpret that I am exempt as I'm under €18000, does this not count for those in self employment perhaps?

Alas, that only means you will be taxed at the lower rate (which is what the revenue assessed you on)

augusta24

smcgiff wrote: »

Did you have any of the following...

Private refuse charges
Medical expenses such as doctors fees
Education expenses (some of which qualify)

No, I was still living at home with parents so the private refuse charges wouldn't apply. Also had a gp card at the time so the only medical expense that I would have paid for would be a prescription each month that was about €12, but I really would not have thought I could claim this as an expense?

Likewise, no education expenses for that period of time.

augusta24

smcgiff wrote: »

Alas, that only means you will be taxed at the lower rate (which is what the revenue assessed you on)

Thanks for your quick reply, I really appreciate it as I find these things much easier to accept once I understand why I have to pay them!

So just to clarify, are you saying that since I am self employed the exemption for being under €18000 does not count for me?

smcgiff

augusta24 wrote: »

Thanks for your quick reply, I really appreciate it as I find these things much easier to accept once I understand why I have to pay them!

So just to clarify, are you saying that since I am self employed the exemption for being under €18000 does not count for me?

At the risk of asking a delicate question are you over 65 years of age?

Geuze

Over 65s pay lower taxes in Irl (which is unfair).

The 18k single / 36k married exemption applies to >65 only.

augusta24

smcgiff wrote: »

At the risk of asking a delicate question are you over 65 years of age?

Geuze wrote: »

Over 65s pay lower taxes in Irl (which is unfair).

The 18k single / 36k married exemption applies to >65 only.

No I'm not over 65! Thanks for your replies guys, I really appreciate it!

augusta24

Hi again everyone ,

Thanks again for all your help with this issue.

I am just about to pay this tax, however I had one further query I was hoping to clarify before I do so.

Basically just wondering, am I right in saying that i have to pay USC at 2% on all of my income from 2011 even though it is below €10000. Yet income from 2012 below €10036 is not subject to this?

Can anybody clarify if I inserts and this correctly and if so why is that??

Many thanks again!

Citizenpain

The Exemptions changed between 2011 and 2012

2011 there is no USC if your income is less than 4k
2012 there is no USC if your income is less than 10k

augusta24

Citizenpain wrote: »

The Exemptions changed between 2011 and 2012

2011 there is no USC if your income is less than 4k
2012 there is no USC if your income is less than 10k

Thanks for that. Can I ask what the reasoning behind this is though, does anyone know? Seems like such a difference ? Unfortunately I am paying tax for just 2011 and am not working anymore so won't be payin any for 2012, kind of annoying that I'm paying the USC when I wouldn't have to had it been 2012!

Citizenpain

To quote the minsister from the last budget

"Universal Social Charge

In another fairness measure, we have reviewed the impact of the Universal Social Charge and I am pleased to announce that today I am proposing changes to the USC that will help the low paid, part-time and seasonal workers in labour intensive areas like the hospitality sector and in farming. From 1 January 2012, the exemption level will be raised from €4,004 to €10,036.
This will mean that taxpayers will be able to earn up to that level without incurring the USC. This measure benefits nearly 330,000 people and will assist people to move into the labour market.
The Revenue Commissioners will collect the USC on a cumulative basis next year, thereby reducing the risks of the over or underpayment of the USC, and this will offset the costs of the very positive change made for the lower paid. "