Self - employed question

Coala

Hi,

Situation is:

Self-employed person started work 10th October. And Income for the year 2007 lets say is €3,800. So I understand he is assessed on actual basis.

So his income tax is 3,800 x 20%= 760

PRSI 3,800 x 3% = 114 , increased to minimum €253

Health Contribution 2% - exempt (as it is less than 24,960)

Questions are:

1. What would be his tax credits for that 2,5 months?(1,760 *3/12 ?)

2. Does he have to pay income tax and PRSI together in one payment?

3. Where exactly is that taxes payable? I know to Collector General, but there are different boxes for each type of payments.

I am working for company and we just recieve payslips for corporation tax where just fill in and send cheque. And same for the PRSI - it is included in P30. Thats why i don't have idea how it works for self - employed.

And as I know there is not minimum income what would be exempt from income tax?


Thanks for any help

Mr. Incognito

Okay,

Number of points raised there.

What were you doing before the self employment in October?


1. What would be his tax credits for that 2,5 months?(1,760 *3/12 ?)
Well, personal credit of 1760. If PAYE was applied to Income earned before October you may be entitled to the PAYE Credit also 1760 for 2007.
In additon credits are available for Services charges/ Home Carer's etc. ful list on Revenue.ie
The credits are for the whole year. If there was no employment before October the credit would be applied against the tax for the three self employed months up the the level of tax paid- they are not a refund mechanism.

2. Does he have to pay income tax and PRSI together in one payment?
If your income is below €3,174 there is no PRSI obligation. Self employed persons are class s where both employed and self employed PRSI is payable on earnings for self employment. (The employment would be done through the payroll) PRSI is collected in the same manner as income tax. i.e payable by October 31 of the year following the year of assessment.

3. Where exactly is that taxes payable? I know to Collector General, but there are different boxes for each type of payments.
Download a Form 11 from www.revenue.ie. Fill that out and pop it back to the Collector General in Limerick with the payment. The retrn address is on the cover page. I'm not sure off hand what their bank account is but you can make an electronic payment if you wish.

Coala

Thanks SetantaL

it helped. But does he has to pay that minimum €253 on PRSI if he just started that work and actually worked only 12 weeks? Or it does not metter? for example his income was €3,175 and would have to pay that €253 anyway?

Mr. Incognito

if your income is below €3,175 there is a box you can tick on the Form 11 which is a PRSI exemption. You would not have to pay the € 253 minimum as your income is too low to pay PRSI.

Coala

yes but 3,175 is by 1 euro over limit. That means you have to pay anyway?

Mr. Incognito

What?

Look, €3175 or above- pay.

€3174 or below- don't pay PRSI or minimum € 253. .

Coala

Ok that's clear, thanks