Are you on top of your self assessment returns?
October 31st is fast approaching. If you aren’t already thinking about compiling everything you need for your tax return then it’s time to get organised.
Filing your tax return independently can be frustratingly complex and time-consuming. By following our straightforward advice, you can make the process as painless as possible.
Or you could simply choose to delegate responsibility of compiling and filing your returns to a qualified expert in Irish tax returns. Whichever you choose our advice is to start planning as early as possible.
How to submit your tax return
This section covers your three primary submission options:
Form 11 is the document traditionally used by self-employed individuals and partnerships to file a tax return.
This form contains all the relevant fields to log your income as well as any exemptions, tax credits or other deductions.
If this form applies to you, you should have received a paper version.
Form 11S is an abridged version of Form 11 that is dispatched to individuals who aren’t required to log as many details.
You are also eligible to apply to file your tax return digitally by applying to use the Revenue Online Service (ROS).
Successful applicants can administer the entire process online and are given approximately two weeks’ extra time in which to submit their documents. The deadline for submitting your Irish Tax Returns online is the 14th November 2017.
Tax return deadlines
Here is an overview of the key deadlines for filing your tax returns:
These deadlines have already lapsed. However, being aware of and sticking to these dates may help you next year.
- 31st March: Collate all relevant financial documents (purchases/sales invoices, bank statements and receipts). The earlier you get it in the better as you can plan forward for any tax bill.
These deadlines are coming soon and will depend on whether you intend to submit a paper-based tax return or utilise the Revenue Online Services (ROS).
Whichever method you choose, you should have filed your tax return, paid your outstanding balance, submitted your self-assessment and paid preliminary tax for the current year by the relevant deadline.
- 31st August: Early submission target/deadline for avoiding self-assessment panel
- 31st October: Income tax return deadline (paper)
- 10th November: ROS deadline
- 14th November: ROS extended deadline
- 31st December: End of current income tax year
What charges do tax returns cover?
Income Tax is levied on your personal income.
The amount of income tax you are liable to pay is worked out based on your total income, minus any:
The Income Tax year runs from January to December. ‘Month 1’ runs from 1st-31st January, while ‘Week 1’ runs from 1st-7th January, and so on.
Pay Related Social Insurance (PRSI)
Providing you are aged 16-66 and earned over €5,000 in the last year, you will be liable to pay PRSI.
The amount due is calculated using your gross income, minus any capital allowances. Most self-employed people pay ‘Class S’ PRSI, which is charged at a rate of 4% of gross income (min. payment €500).
Universal Social Charge (USC)
USC is a type of tax that’s payable on your total income, including:
- Employment income
- Taxable employer benefits
- Self-employed income
- Rental income
- Share option gains
- Dividend income
USC is paid on your total annual income, unless this amounts to less than €13,000.
Tax-deductible expenses and tax credits
The more legitimate expenses and tax credits you declare in your tax return, the lower your overall tax bill will be.
Tax-deductible expenses are defined as any costs incurred “wholly and exclusively” for the purpose of your business.
If this outlay is partially allocated for personal use, you need to work out what portion of the expense was for businesses purposes and claim for this amount only.
Tax-deductible expenses include:
- Purchase of goods for resale
- Employees’ pay
- Accountancy fees
- Rent and bills for business premises
- Running costs for business vehicles/machines
- Lease payments for business vehicles/machines
- Interest payments for money borrowed to finance business
- Costs accrued before trading commenced
If registered for Value Added Tax (VAT), you should exclude this amount from any expenses claimed.
Tax credits are amounts you’re eligible to offset against your tax liability.
This includes credits relating to a host of personal and business-related circumstances, such as:
- Employee Tax Credit
- Rent Tax Credit
- Dependent Relative Tax Credit
- One Parent Family Tax Credit
- Age Tax Credit
In addition, if you’ve joined the ‘Start Your Own Business’ scheme, you can claim an exemption on income tax for profits up to €40,000 per year for two years.
Late tax return penalties
Fail to meet these deadlines and you’ll be required to pay interest and/or a surcharge.
If you submit a preliminary tax payment late, or fail to set up a direct debit for the correct amount, you’ll be charged interest at a rate of 0.0219% for every day after the deadline has passed.
You’ll also have a surcharge added if you pay your income tax late. This will be at a rate of:
- 5% of the tax amount (up to a minimum of €12,695) if you make the payment within two months of the deadline
- 10% of the tax amount (up to a minimum of €63,485) if the payment is made after this two-month window
Tax return mistakes
These are five of the most common mistakes to avoid when preparing to file your tax return:
- Missing deadlines: Simple yet expensive, failing to file your tax return on time will result in additional interest and surcharges.
- Not declaring all income: You need to declare your business income, personal income (from the business and other sources, including exempt income), and potentially any spousal income.
- Tax credits: Tax credits aren’t automatically applied, so any that you don’t declare (including some lesser-known ones) won’t be factored in.
- Allowable expenses: You could also miss out on allowable expenses if you fail to declare. Ensure you’ve filed all relevant receipts throughout the year.
- Professional support: If you’re unsure about any aspects of your tax return, it’s better to speak to an experienced tax professional than risk a costly mistake.
Additional income to consider
As mentioned above, you need to check that you’ve declared all relevant sources of income when filing your tax return. This additional income might include:
- Social welfare payments
- Rental income
- Income from trusts
- Deposit interest
- Maintenance payments
- ‘Nixers’ (after-hours/part-time work)
- Fees/commissions (services not linked to your business)
Tax return checklist
Here is a list of everything you’ll need to file your tax return;
- Form 11/Form 11S/ROS certification and login credentials
- Sole trader/partnership account details
- Records of income (employment, rental, savings, capital gains and additional)
- Records of business expenses (receipts etc.)
- Proof of tax relief status (e.g. medical receipts)
Tax return experts
At Greavy & Co (greavyandco.ie) we have years of proven expertise helping self-employed individuals and partnerships file tax returns with minimal fuss.
Our number one priority is making sure you never pay more tax than needed. We will use our experience to help you file both a watertight tax return and ensure you receive any refunds you’re due.
Get all the guidance you need to submit your tax return with minimal stress.
Greavy & Co Accountants Dublin,
8 Clanwilliam Square,
Grand Canal Quay,