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PAYE Tax Credit

  • 19-01-2014 10:01pm
    #1
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭


    Hi,

    Just a quick question.

    A small business 4 employees & the owner. The business is un-incorporated (i.e sole trader), and all employees & the owner take a weekly salary which is run through the payroll system and is subject to PAYE/USC & PRSI. All payroll returns & taxes are submitted to the Revenue & paid accordingly.

    Is the owner entitled to a PAYE Allowance? The business is not a company, thus he is not a proprietary director. Yet his salary income (which is 90% of the profits) is subject to PAYE, as he has opted in to pay himself this way.

    There is nothing on the revenue website that would exclude him from claiming the PAYE allowance
    http://www.revenue.ie/en/tax/it/credits/paye-employee-credit.html

    Does anyone have anything in the Finance / Tax Acts that would disqualify him?

    Thanks.


Comments

  • #2
    Legend100
    Registered Users, Registered Users 2 Posts: 736 ✭✭✭Legend100


    how can the business owner opt to be taxed under the PAYE system- he is a sole trader assessable on the profits in the business

    Any "salary" would just be deemed as drawings?


  • #3
    Alan Shore
    Registered Users, Registered Users 2 Posts: 735 ✭✭✭Alan Shore


    Hopefully you have not submitted the P35 as you can't be an employee on your own P35. You are subject to self assessment and no you are not entitled to the PAYE as you are not (dispute what you think) within the PAYE system.


  • #4
    [Deleted User]
    Posts: 0 ✭✭✭ [Deleted User]


    Alan Shore wrote: »
    Hopefully you have not submitted the P35 as you can't be an employee on your own P35. You are subject to self assessment and no you are not entitled to the PAYE as you are not (dispute what you think) within the PAYE system.

    !!! He is not entitled to the PAYE Allowance and should be paying Class S PRSI. The fact he is or is not on the P35 is irrelevant, providing he is correctly taxed. Even if incorrect on the P35, it may well be correct(ed) when his Form12 is filed, well apart from paying too much employer PRSI...


  • #5
    2ndcoming
    Registered Users, Registered Users 2 Posts: 3,605 ✭✭✭2ndcoming


    He's a sole trader, he won't be filing a Form 12, he'll be doing an 11E. He'll get a credit on his 11E for whatever he deucted on himself through the payroll, but he's not a PAYE employee so it's really just a way of putting aside his income tax during the year. He gets no PAYE credit.


  • #6
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭swanvill


    Hi,
    Thanks for all information.


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