Which Revenue Form 12 to use for tax year up to end Aug 2014

transistor

Wife has started as sole trader dance teacher. I understand that she can choose tax accounting year to suit so we've chosen school year September to August. As I understand it this means that the accounting year is over before the October 31st deadline so we don't have to calculate future profits to 31st December.

For Sept 2013 to Aug 2014 which Form 12 does she use - 2013 or 2014?

Many thanks.

barneystinson

transistor wrote: »

Wife has started as sole trader dance teacher. I understand that she can choose tax accounting year to suit so we've chosen school year September to August. As I understand it this means that the accounting year is over before the October 31st deadline so we don't have to calculate future profits to 31st December.

For Sept 2013 to Aug 2014 which Form 12 does she use - 2013 or 2014?

Many thanks.

If she's going to be a sole trader she'll need to register for income tax and file a Form11.

If she commenced in 2013, she needs to file a Form 11 for 2013, regardless of what period she chooses to prepare accounts for.

If she chooses to go for a Sept - Aug year then she will be assessed in 2013 on 4/12 of the first accounting period's profits. She will also pay her 2014 tax based on these accounts.

transistor

Thanks, Barney.
OK, Form 11 for "Tax Return and Self-Assessment". Form 12 is PAYE.

So, for Sept to Aug tax account year what is supposed to be returned today? Just 09/2013 to 12/2013?

ebbsy

transistor wrote: »

Thanks, Barney.
OK, Form 11 for "Tax Return and Self-Assessment". Form 12 is PAYE.

So, for Sept to Aug tax account year what is supposed to be returned today? Just 09/2013 to 12/2013?

Yes. Do it on Ros and you have until 13th Nov.

Get some professional advice as well and have it done right would be my opinion.

barneystinson

transistor wrote: »

Thanks, Barney.
OK, Form 11 for "Tax Return and Self-Assessment". Form 12 is PAYE.

So, for Sept to Aug tax account year what is supposed to be returned today? Just 09/2013 to 12/2013?

No return due yesterday for a trader who commenced in 2013. You have an extra year to file the first return, but there should be a preliminary tax payment made for 2014.

CFO4Hire

barneystinson wrote: »

No return due yesterday for a trader who commenced in 2013. You have an extra year to file the first return, but there should be a preliminary tax payment made for 2014.

Hi,

This is incorrect. If you commenced trading in 2013 you must file a tax return before 31st October 2014 for the Year 2013 and the period of trading in that tax year. If you are registered on ROS the deadline is 13th November 2014.

The income tax in the first year is based on the profit of the business from the commencement date to end of tax year. In your case 01/09/13 to 31/12/14. The second year is based on the first 12 month period ending in the tax year, in your case Year Ended 31st August 2014.

You are also due to pay preliminary tax before 31st October 2014 (or later date via ROS 13th November 2014) for the tax year 2014. This is either 100% of the previous years liability or 90% of what would be estimated as the final liability for 2014.

If you need any further details please don't hesitate to PM me.

Regards,
CFO4Hire

CFO4Hire

barneystinson wrote: »

No return due yesterday for a trader who commenced in 2013. You have an extra year to file the first return, but there should be a preliminary tax payment made for 2014.

Hi,

This is incorrect. If you commenced trading in 2013 you must file a tax return before 31st October 2014 for the Year 2013 and the period of trading in that tax year. If you are registered on ROS the deadline is 13th November 2014.

The income tax in the first year is based on the profit of the business from the commencement date to end of tax year. In your case 01/09/13 to 31/12/13. The second year is based on the first 12 month period ending in the tax year, in your case Year Ended 31st August 2014.

You are due to pay preliminary tax before 31st October 2014 (or later date via ROS 13th November 2014) for the tax year 2014. This is either 100% of the previous years liability or 90% of what would be estimated as the final liability for 2014.

If you need any further details please don't hesitate to PM me.

Regards,
CFO4Hire

barneystinson

CFO4Hire wrote: »

Hi,

This is incorrect. If you commenced trading in 2013 you must file a tax return before 31st October 2014 for the Year 2013 and the period of trading in that tax year. If you are registered on ROS the deadline is 13th November 2014.

The income tax in the first year is based on the profit of the business from the commencement date to end of tax year. In your case 01/09/13 to 31/12/13. The second year is based on the first 12 month period ending in the tax year, in your case Year Ended 31st August 2014.

You are due to pay preliminary tax before 31st October 2014 (or later date via ROS 13th November 2014) for the tax year 2014. This is either 100% of the previous years liability or 90% of what would be estimated as the final liability for 2014.

If you need any further details please don't hesitate to PM me.

Regards,
CFO4Hire

Hi and welcome to the forum, but I'm afraid it is you who is incorrect:
http://www.revenue.ie/en/tax/it/leaflets/it10.html#section7
Making Tax Returns under Self-Assessment for the first time

Individuals, who enter the self-assessment system because they have commenced to trade, have until the return filing date for the second year to submit tax returns for both the first and second year of trading. However, as mentioned previously, early filing of returns is advisable, as it establishes tax liability due in advance of payment deadlines.
Early filing does not bring forward the payment date. It is your responsibility to calculate your own tax liabilities. However, if you file your tax return on or before 31 August, Revenue will calculate your tax liability for you based on your return for the year in question. This will assist you in paying the correct amount by the due date, 31 October. If you file your return after 31 August we cannot guarantee to provide you with a final assessment before 31 October and you may have to do your own calculations.

I think I'll hold off on PM'ing you for now, but if you need to know anything please feel free to PM me...

CFO4Hire

Duly noted.

So in this scenario Prelim tax is due now for 2014 but the tax for 2013 due on submission of the return prior to October 2015?

barneystinson

CFO4Hire wrote: »

Duly noted.

So in this scenario Prelim tax is due now for 2014 but the tax for 2013 due on submission of the return prior to October 2015?

Nope. You need to distinguish between the two totally separate obligations:

1. PAYING your tax - no change to the normal requirements, so in 2013 you have to pay at least the lower of 90% of 2013 liability (unknown entity at that time) or 100% of the previous year's liability (always nil in a commencement scenario). So while technically you had an obligation to pay in 2013, it was always going to be whatever you like, from nil upwards. In 2014 however, you need to pay your tax for 2013 by 31/10 and also pay your preliminary tax for 2014. So if you reckoned you'd owe tax for 2013, you codded yourself if you don't pay prelim tax in Oct 2013, or set up a DD through ROS, or put away some money on deposit, because you'll be getting hit for a double whammy in October 2014.

2. FILING your tax return - you have an extra year to file your return for year 1, so you can file for 2013 and 2014 at any time up to 31/10/2015. However, if you think about it logically, if you have to pay your tax for 2013 by 2014 (which you do as per point 1 above and the link I sent earlier to Revenue makes that clear elsewhere in the self-assessment bumpf), then you must have done your accounts and your tax computation to know how much this is... in which case you may as well just file the return while you're at it!

hjr

Sorry to hijack tread, but similar query.

When apportioning the accounts for 2012, at 4/12 of a full year, what figures are input on ROS in the accounts boxes...do all the figures have to be apportioned? Or are the full years accounts figures used in the accounts boxes?

Thanks!