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Self Assessment Obligation

  • 02-10-2013 04:38PM
    #1
    2013tom2013
    Registered Users, Registered Users 2 Posts: 3 ✭


    Hey guys, just looking for some advice regarding my income tax liability for the year.

    Started Trading in March of this year (2013) so I do understand that I have the option of delaying preliminary tax payment date until 2014 (based on 100% of previous years liability).

    However, I have been advised to pay preliminary tax for in Oct 2013 in order to avoid having to pay full 2013 liability together with the 2014 preliminary tax in Oct 2014.

    So my queries are:
    1. Preliminary Tax - I understand that this will be an estimate of tax liability for months from commenement - Dec 2014 - 10 months (Actual Basis for 1st Year). How will I actually go about estimiating and paying this without having my tax return done?? Is there somewhere in online ROS facility that could help me with this perhaps?

    2. Tax Return 2013
    Would I be correct in saying that this would not also have to be filed until 2015 but it would be best to file in 2014? Would appreciate advice on this. Also, what months would be assessable?

    Thanks in advance.


Comments

  • #2
    lclohessy
    Registered Users, Registered Users 2 Posts: 22 ✭lclohessy


    The preliminary tax rules as you correctly stated is either 100% of prior period liability which is zero as its a commencement year
    or 90% of the estimated tax liability.

    This is an option there is NO preliminary tax due therefore any payment can be made to the revenue.

    The Income Tax return for 2013 is due on 31 October 2014 extension may be given if filed online to 15 November 2014.


  • #3
    2013tom2013
    Registered Users, Registered Users 2 Posts: 3 ✭2013tom2013


    lclohessy wrote: »
    The preliminary tax rules as you correctly stated is either 100% of prior period liability which is zero as its a commencement year
    or 90% of the estimated tax liability.

    This is an option there is NO preliminary tax due therefore any payment can be made to the revenue.

    The Income Tax return for 2013 is due on 31 October 2014 extension may be given if filed online to 15 November 2014.


    Thats great so even if preliminary tax is underpaid in 2013 there is no interest/penalties? Would this be something you would advise paying at this stage? What way might you advise? Just do a rough calculation?

    Ah alright, so I actually will have the file 2013's return in Oct 2014 (or Nov is extension used). I thought there was an exentions to 2015 for 1st year of trading?

    Also, does USC and PRSI also have to be included in this payment?


  • #4
    Alan Shore
    Registered Users, Registered Users 2 Posts: 735 ✭✭✭Alan Shore


    If I were you I would pay a reasonable amount for prelim 2013. What do you expect your profit to be for year ended 28 February 2014. Take 10/12 of this and add it to you income for Jan/Feb 13 and see what the tax, PRSI and USC is.

    Then in Oct /Nov 14 you will owe the tax for 2014 ie the 12 months ended 28.02.14. Don't get drawn into but I already paid tax up to December ect. You can use the same set of accounts for 2013 and 2014.

    You have the option of not filing the return until 2015 but why leave it if the return is ready.


  • #5
    2013tom2013
    Registered Users, Registered Users 2 Posts: 3 ✭2013tom2013


    Alan Shore wrote: »
    If I were you I would pay a reasonable amount for prelim 2013. What do you expect your profit to be for year ended 28 February 2014. Take 10/12 of this and add it to you income for Jan/Feb 13 and see what the tax, PRSI and USC is.

    Then in Oct /Nov 14 you will owe the tax for 2014 ie the 12 months ended 28.02.14. Don't get drawn into but I already paid tax up to December ect. You can use the same set of accounts for 2013 and 2014.

    You have the option of not filing the return until 2015 but why leave it if the return is ready.

    Thanks a lot for your reply, greatly appreciated.

    1. How would I add 10/12 of income to Jan/Feb given that business was not trading until March 13. Could you please clarify that point?

    2. Regarding 2014, wouldent I be paying tax on the same set of accounts then for 2014 as for 2013?

    Thanks.


  • #6
    lclohessy
    Registered Users, Registered Users 2 Posts: 22 ✭lclohessy


    2013tom2013 wrote: »
    Thanks a lot for your reply, greatly appreciated.

    1. How would I add 10/12 of income to Jan/Feb given that business was not trading until March 13. Could you please clarify that point?

    2. Regarding 2014, wouldent I be paying tax on the same set of accounts then for 2014 as for 2013?

    Thanks.

    1. Calculate the profit to date to the end of september this represents 7 months of trading profit. Take this profit divide by 7 than multiple by 12 this will be an estimate for the first year assuming that you expect similar profit for the rest of the period.
    2. This is based upon commcement rules situation which is as follows

    1. 2013 - based upon an actual year basis I.e accounts profit march to december 01/03/2013 to 31/12/2013.
    2 2014 accounts year end basis - 01/03/2013 to 28/02/2014
    3 2015 accounts year end basis - 01/03/2014 to 28/02/2015 PLUS reassess year 2 to where accounting profit exceeds the actual profit (31/12/2014) this excess may be used to reduce year 3 profits

    To avoid this and difficulty set the year end at December with the first year with 10 months March to December 2013 than year 2 based on a year end of 31 december 2014.


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  • #7
    Jonathan222
    Registered Users, Registered Users 2 Posts: 91 ✭✭Jonathan222


    Think I may have posted to the incorrect forum ealier but I'm Using ROS online for the first time this year(used form 11 last year) and having made a prelim payment for 2012, where does it show on ROS online that my prelim payment has been incorporated into my 2012 liability?

    Also, any ideas where you populate the prelim for 2013?

    Any ideas?


  • #8
    lclohessy
    Registered Users, Registered Users 2 Posts: 22 ✭lclohessy


    Jonathan222 wrote: »
    Think I may have posted to the incorrect forum ealier but I'm Using ROS online for the first time this year(used form 11 last year) and having made a prelim payment for 2012, where does it show on ROS online that my prelim payment has been incorporated into my 2012 liability?

    Also, any ideas where you populate the prelim for 2013?

    Any ideas?

    The prelim paid does not have to be input in any section within the form.

    When uploading the return a screen will appear after completion of the form 11 to input the balance to be paid on the liability i.e the liability less the prelim and under this section prelim declaration for 2013 can be made.

    The overall liability of balance for 2012 plus prelim can be paid online if set-up for RDI function on ROS.


  • #9
    Jonathan222
    Registered Users, Registered Users 2 Posts: 91 ✭✭Jonathan222


    lclohessy wrote: »
    The prelim paid does not have to be input in any section within the form.

    When uploading the return a screen will appear after completion of the form 11 to input the balance to be paid on the liability i.e the liability less the prelim and under this section prelim declaration for 2013 can be made.

    The overall liability of balance for 2012 plus prelim can be paid online if set-up for RDI function on ROS.

    Graet and thanks for that, but RDI? excuse my stupidity, but that stands for?
    The form was pre-populated form last years submission, so I've just updated the figures and clicked 'calculate', so are you saying it's the next screen I go to where my 2012 prelim figure will automatically be incorpated into the 2013 liability?


  • #10
    lclohessy
    Registered Users, Registered Users 2 Posts: 22 ✭lclohessy


    Jonathan222 wrote: »
    Graet and thanks for that, but RDI? excuse my stupidity, but that stands for?
    The form was pre-populated form last years submission, so I've just updated the figures and clicked 'calculate', so are you saying it's the next screen I go to where my 2012 prelim figure will automatically be incorpated into the 2013 liability?

    Rdi ros debt instruction - entering your bank details to authorise ros to take funds from your bank account this can be done on your ros main screen

    When entering the payment screen this will not incorporate your prior prelim payment you should indicate the balancing figure and under this enter prelim estimate for 2013 this will total your payment which you can pay by rdi


  • #11
    Jonathan222
    Registered Users, Registered Users 2 Posts: 91 ✭✭Jonathan222


    lclohessy wrote: »
    Rdi ros debt instruction - entering your bank details to authorise ros to take funds from your bank account this can be done on your ros main screen

    When entering the payment screen this will not incorporate your prior prelim payment you should indicate the balancing figure and under this enter prelim estimate for 2013 this will total your payment which you can pay by rdi

    Many thanks


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