Self employed Tax Return

banjacksed

Im selfemployed sole trader, tax and vat registered, Have done my books and have a 5500 tax liability to be made by 31 oct 2013, I use ros,

Have no problem in the world paying it fair dues,

Problem is i cannot pay preliminary tax for the same amount? I think it's crazy.

What can i do, my vat is paid up and so will my tax and i hold a current tax free cert,

Is there anything i can do to lets say get around preliminary tax ? Not tax avoidence i just dont see how i can pay it, in fact i cant.

Any thoughts on this
Thanks in advance

Alan Shore

banjacksed wrote: »

Im selfemployed sole trader, tax and vat registered, Have done my books and have a 5500 tax liability to be made by 31 oct 2013, I use ros,

Have no problem in the world paying it fair dues,

Problem is i cannot pay preliminary tax for the same amount? I think it's crazy.

I assume that you paid no preliminary tax in '12 and now have two years tax to pay.

You have two options 100% of '12 or 90% of '13 so if your profits have fallen then you can pay less.

Don't know what you mean by Premininary Tax is crazy - the fact that you have to pay your tax for the year in Novemenber is crazy you can pay it monthly by direct debit.

Gloomtastic!

If it's any help, for the last six years or so, I've never paid preliminary tax and have never heard anything from Revenue about it. We're not talking huge amounts but the thought of me paying tax in advance makes me sick. :mad:

Alan Shore

I can't figure out how people can say "paying in advance". You owe tax for the months of January to October which you pay in November.

banjacksed

Alan Shore wrote: »

I assume that you paid no preliminary tax in '12 and now have two years tax to pay.

You have two options 100% of '12 or 90% of '13 so if your profits have fallen then you can pay less.

Don't know what you mean by Premininary Tax is crazy - the fact that you have to pay your tax for the year in Novemenber is crazy you can pay it monthly by direct debit.

No,I didn't pay pre lim tax as i hadn't had a tax liability in 2011 ?

banjacksed

Alan Shore wrote: »

I can't figure out how people can say "paying in advance". You owe tax for the months of January to October which you pay in November.

Well it depends how people look at it?

My tax due this month is from the year jan 2012 to dec 2012 which is due to be paid oct 2013, No problems, and jan 2013 to dec 2013 is due in oct 2014, it's not a limited company im running just selfemployed (single) person,

So lets just say im earning 50 grand a year as a single factory worker, tax is taken every month or week, ok

But if im a selfemployed earning the same sum, In reality there saying what you made last year is due now and what you earn this year to date should be paid aswell which is a bit nuts, imho,

banjacksed

Gloomtastic! wrote: »

If it's any help, for the last six years or so, I've never paid preliminary tax and have never heard anything from Revenue about it. We're not talking huge amounts but the thought of me paying tax in advance makes me sick. :mad:

Thanks for your post, So what did you put in your tax return regarding pre lim tax ?

Alan Shore

So you think that you should earn 12 months profits each year and then pay the tax 10 months after the end of the year for ever.

The Revenue concession of allowing people to pay zero in their first year does the taxpayer no favours in my view. I always advise clients to pay something in year one so that they do not get a surprise, like you, in year two.

Gloomtastic!

banjacksed wrote: »

Thanks for your post, So what did you put in your tax return regarding pre lim tax ?

I post my returns online. From what I remember from a few weeks ago, I just use the same figure as due for 2012, click the box that says I will be sending my remittance later and only pay the tax due for last year.

Alan Shore wrote: »

So you think that you should earn 12 months profits each year and then pay the tax 10 months after the end of the year for ever.

The Revenue concession of allowing people to pay zero in their first year does the taxpayer no favours in my view. I always advise clients to pay something in year one so that they do not get a surprise, like you, in year two.

It's the same in the UK (I never paid pri lim there either!)

I might have invoices dated December that may not be paid until March/April so maybe they're giving you a bit of slack.

Regardless, they always get their money in the end - grrrrrrrr!

dearg lady

banjacksed wrote: »

Well it depends how people look at it?

My tax due this month is from the year jan 2012 to dec 2012 which is due to be paid oct 2013, No problems, and jan 2013 to dec 2013 is due in oct 2014, it's not a limited company im running just selfemployed (single) person,

So lets just say im earning 50 grand a year as a single factory worker, tax is taken every month or week, ok

But if im a selfemployed earning the same sum, In reality there saying what you made last year is due now and what you earn this year to date should be paid aswell which is a bit nuts, imho,

well you're only paying 2 months (Nov/Dec13) in advance. And not even fully. given the options to pay 100% of last years liability or 90% of this years.
You compare it to a factory worker, so why haven't you been putting the tax amount aside each month,then you would have no problem paying it now?

banjacksed

Alan Shore wrote: »

So you think that you should earn 12 months profits each year and then pay the tax 10 months after the end of the year for ever.


The Revenue concession of allowing people to pay zero in their first year does the taxpayer no favours in my view. I always advise clients to pay something in year one so that they do not get a surprise, like you, in year two.

Yes I do think so , And also i think prelim tax for the sole trader is nuts,

banjacksed

dearg lady wrote: »

well you're only paying 2 months (Nov/Dec13) in advance. And not even fully. given the options to pay 100% of last years liability or 90% of this years.
You compare it to a factory worker, so why haven't you been putting the tax amount aside each month,then you would have no problem paying it now?

Read my post, Yes have no problem paying it ? it's prelim i have a prob with, have you any idea that unpaid invoices can be out ? :rolleyes:

banjacksed

Alan Shore wrote: »

I can't figure out how people can say "paying in advance". You owe tax for the months of January to October which you pay in November.

Well if you cant figure that out i give up,

dearg lady

banjacksed wrote: »

Read my post, Yes have no problem paying it ? it's prelim i have a prob with, have you any idea that unpaid invoices can be out ? :rolleyes:

the prelim tax is for THIS YEAR. What do you mean 'unpaid invoices can be out'?

banjacksed

dearg lady wrote: »

the prelim tax is for THIS YEAR. What do you mean 'unpaid invoices can be out'?

I issue credit terms up to 90 days for clients, so how can you pay tax on sales which you havent received yet ?

dearg lady

1. Tax is paid on profit, not sales
2. I didn't dispute that some portion of the tax is paid ahead of time, but as I said already, you made the comparison to a factory worker, if you put the money aside each month it wouldn't be a huge outlay now.
3. 90 days is quite long credit terms, now obviously I don't know what sector you're in, but that's a business choice you made, having weighed up the pro's and con's.

srsly78

banjacksed wrote: »

I issue credit terms up to 90 days for clients, so how can you pay tax on sales which you havent received yet ?

You should operate tax on a monies received basis, not a wishful thinking basis.