Filing Prelim Tax Return when not self employed in 2016?

nivagekim

Hi folks. I'm quite unsure of this process.

I recently (March) registered as self employed sole trader, and am aware I may have to pay preliminary income tax this year. I have spoken to ROS about this and they have said I must file a return for 2016 and this will indicate how much I am due to pay in prelim. However, as I was not self employed in 2016, I can't seem to fulfil the details on the form.

Any help would be appreciated for this novice!

Thanks!

EamonOSullivan

The rule is you can pay 100% of the previous years liability ( in this case 2016 was zero so you pay nothing ) or you can pay 90% of your estimate of the outturn of 2017.

For cashflow management purposes it is wise to pay 90% of your estimated bill for 2017 as you will have some of your tax bill paid for 2017 by the time 2018 rolls around.

Otherwise when it comes to October 2018, you will have to pay your final liability for 2017 PLUS you will have to pay your Preliminary Tax for 2018, which will be 100% of the 2017 bill or 90% of your estimate of 2018's bill. Effectively you will have to come up with 2 years tax on October 2018.

danwhite88

What is the correct form to submit when filling a preliminary tax return?

BillUnder

I've the same query. So does that mean, you have to fill out a form 11 for 2016 and enter 0 for all fields since one only started self employment this year?

EamonOSullivan

I'm not sure there is a form but you need to send in a letter with a draft or cheque stating your name and PPS number, and that the cheque is for 2017 Preliminary Tax.

You need to be registered as a self-employed taxpayer otherwise you are not liable to Preliminary Tax, so the Revenue will not know what to do with the cheque.

Then you need to post the letter and cheque to Collector General, Sarsfield House, Frances Street, Limerick.

Steve

If you register for ROS, it's much smoother and you can call them for help - which I've done and they have always been more than willing to work through it as long as you have figures to hand.

BillUnder

There doesn't seem to be a way to pay preliminary tax via ROS.ie in your first year without submitting a tax return (which you only do in year 2). The last screen of the tax return (form 11) has a text field for how much preliminary tax you want to pay. In the Submit a Payment section if you try and do it without submitting tax return first you will get "There are no periods against which you can make a Payment for this Registration". Alternatively you can ring 1890 27 37 47 and pay with a credit or debit card.

danwhite88

BillUnder wrote:

There doesn't seem to be a way to pay preliminary tax via ROS.ie in your first year without submitting a tax return (which you only do in year 2). The last screen of the tax return (form 11) has a text field for how much preliminary tax you want to pay. In the Submit a Payment section if you try and do it without submitting tax return first you will get "There are no periods against which you can make a Payment for this Registration". Alternatively you can ring 1890 27 37 47 and pay with a credit or debit card.

Say No to 1890 - Revenue (Irish Tax & Customs) Credit/debit card payments 1890273747 – Call Instead 018288045

danwhite88

danwhite88 wrote:

What is the correct form to submit when filling a preliminary tax return?

BillUnder wrote:

I've the same query. So does that mean, you have to fill out a form 11 for 2016 and enter 0 for all fields since one only started self employment this year?

danwhite88 wrote:

What is the correct form to submit when filling a preliminary tax return?

I just spoke to the revenue regarding paying online. Under the "Payments & Refunds" heading select Tax payment/declaration and the tax type will be Income Tax.

He says as I have set up in 2017 I am paying preliminary tax for this year and this will be settled next year. Still I am unsure how much I need to pay. But there is an option to do this via the Ros website.

exaisle

danwhite88 wrote: »

I just spoke to the revenue regarding paying online. Under the "Payments & Refunds" heading select Tax payment/declaration and the tax type will be Income Tax.

He says as I have set up in 2017 I am paying preliminary tax for this year and this will be settled next year. Still I am unsure how much I need to pay. But there is an option to do this via the Ros website.

He's wrong. Kinda. You could make a return next year, but because you commenced in 2017 you're not obliged to make a tax return until 31st October 2019 at which point you should submit your 2017 and 2018 returns. So really, it might be settled in two years time.

But...be sure to pay preliminary tax for 2017 (and 2018). You don't want a big shock two years from now. Monthly direct debit is a good idea (you can start from January 2018 for the 2018 tax year) but you'll have to make once-off payment for 2017 because you can't set up direct debit for 2017 at this point in the year. (Go on..ask me why. I haven't a clue. I know if somebody wanted to pay me money I'd welcome them with open arms, but it's the civil service you're dealing with so who knows!).