Self-Employed

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Income Tax & Preliminary Tax

Should I be Income Tax Registered?

You should register for Income Tax if;

  • You are self-employed
  • In receipt of additional income outside of PAYE, exceeding €5,000
What is Preliminary Tax and do I have to pay it?

Preliminary Tax is an estimate of the income tax due for a tax year. This is paid in advance of filing your income tax return for that year. This is due by 31st October of that tax year.

Preliminary Tax due is;

  • 90% of the tax due for that year
  • 100% of the tax due for the previous tax year
  • 105% of the tax due for the tax year preceding the previous year but only applicable if currently paying by direct debit.

For example, Preliminary Tax due for the year 2020 is due to be paid by 31st October 2020. This can be submitted when filing your 2019 Income Tax Return. Underpayment or late payments of Preliminary Tax may be charged interest for each day past the deadline.

Pay and File System – how does this work?

By the 31st October each year, you must;

  • Pay your Preliminary Tax for that year i.e 2020
  • File your Tax Return for the previous year i.e 2019
  • Pay any balance of tax due for the previous year i.e 2019

The pay and file deadline is extended into November for returns filed online through Revenue Online Services (ROS). Late filing of tax returns will incur surcharges of 5% of tax due within 2 months of filing or 10% of tax due thereafter.

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New Enterprise Support Grant

The Department of Employment Affairs and Social Protection has announced a new Enterprise Support Grant will be made available to all self-employed who ceased the Pandemic Unemployment Payment after 25th June 2020.

A grant of up to €1,000 will be available to help re-open their businesses, subject to the following conditions.

  • Must be Tax and PRSI compliant
  • Was in receipt of the Covid-19 Pandemic Unemployment Payment and ceased same after 25th June 2020
  • Must employ less than 10 employees
  • Have an annual turnover of less than €1million
  • Not eligible to Covid-19 Business Restart Grant or other re-opening grants

The grant is 80% of the cost to a maximum of €1,000 towards reopening of your business, which can include;

  • Safety measures
  • Business advice or mentoring
  • Repairs
  • Fuel
  • Wages

Further details on how to apply will be made available in the coming weeks

While you are here, Read more of our Covid-19 update blogs here

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Extension of Pay & File Deadline for Self-Assessed

Revenue have confirmed they have extended the Pay & File Deadline to Tuesday 12th November for all self-assessed individuals. In order to qualify for this extension, you must pay and file through ROS.

The individual must;

  • Pay Preliminary Tax due for 2019
  • Pay Income Tax Balance for 2018

This extension also applies for beneficiaries who have received gifts and inheritances with valuation dates in the year ended 31st August 2019. The Capital Acquisition return and payment must be paid through ROS to qualify.

As with every year, as it is an extremely busy period, we would advise all our clients that in order to give enough time to review your tax year and to submit it, paperwork must be submitted as soon as possible for 2018

Have a query? Contact us on 01 539 7999

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Social Welfare jobseeker’s benefit now available to the Self Employed

From November this year, all self-employed workers and contractors will be entitled to claim jobseeker’s benefit should they go out of business.

As announced in last year’s budget,

“The introduction of a new Jobseeker’s Benefit scheme for the self-employed represents the next step in the

Government’s work to extend PRSI benefits and will provide an income safety net to thousands of small and medium businesses throughout the country.”

Currently, the rate is €203 per week, with dependant supplements also available. Self Employed workers will now have access to a range of employment supports also.

To qualify, a self-employed worker has to have in excess of 260 (5 years) PRSI contributions to obtain job seekers benefit for 9 months, otherwise, this reduces to 6 months.

Why not read some of our previous blogs here
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