PRSI & Capital Allowances

BCH246

Hi

Would anyone be able to tell me, is PRSI calculated on Trading Net Profit before or after the deduction of Capital Allowances?


Thanks

Lockedout2

BCH246 wrote: »

Hi

Would anyone be able to tell me, is PRSI calculated on Trading Net Profit before or after the deduction of Capital Allowances?


Thanks

After

BCH246

Thanks for that - that is what I thought, but Revenue have come back to me this morning and said that

PRSI is charged on income before the deduction of capital allowances and pension contributions

The profit, which is from a trade, is for tax year 2015 and I am using the Start Your Own Business Relief, does this make a difference?

Thanks again for the help.

tanit

BCH246 wrote: »

Thanks for that - that is what I thought, but Revenue have come back to me this morning and said that

PRSI is charged on income before the deduction of capital allowances and pension contributions

The profit, which is from a trade, is for tax year 2015 and I am using the Start Your Own Business Relief, does this make a difference?

Thanks again for the help.

I couldn't find anything explaining in general the capital allowances subtraction in the Revenue website but I found this on the Welfare website it says that you exclude capital allowances from your net profit.

Call them again to clarify the issue because there is nothing as far as I know that excludes Capital Allowances on your case

Sunny Dayz

I think Prsi is calculated before capital allowances. Income tax and USC is calculated after capital allowances (depending on the nature of the capital allowance)

tanit

Sunny Dayz wrote: »

I think Prsi is calculated before capital allowances. Income tax and USC is calculated after capital allowances (depending on the nature of the capital allowance)

Capital Allowances is the way Revenue likes Depreciation to be calculated. Depreciation is an allowable expense in the business. Prsi cannot be calculated before capital allowances and the Welfare website says you must exclude them.

I know I couldn't get a specific reference on the Revenue website but I'm 100% sure that capital allowances are deducted from profits before the calculation for Prsi liability. There is however a set of capital allowances that are not deducted before USC calculations and maybe Prsi (not sure about this one), but your normal/standard capital allowances are deducted from net profit before calculations for USC and PRSI

barneystinson

OP have you input the figures into a ROS form 11 to see what way Revenue's own software calculates it? (Hint: it should be charging PRSI on the profit figure after deducting cap all's...)