Tax

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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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Did you recently get married? It may pay to let Revenue know!

Once you are married, it may be worth contacting your local tax office to advise them, as you may be due a tax refund!

In the year of marriage, both partners are treated as single people, if the result of your assessment as single people is greater than the tax you would pay if you were assessed as a married couple, a refund of the difference is due to you.

This rebate usually occurs where a couple are taxed at difference tax rates and unused tax credits can be availed of by the other spouse.

Whether you are a married couple or a single person with more than one source of income, you have certain rate bands and credits available to you with regards to Tax and USC. In order to ensure you do not overpay tax these allowances should be allocated according to the level of income between spouses and/or different sources of income, subject to Revenue limits.

After the year of marriage review, you can opt to be treated as jointly assessed, separately assessed or as a single person. We would advise to get advice on what treatment suits your situation.

So, you want to be jointly assessed?

Joint assessment is the most beneficial for a married couple. Tax Credits, reliefs and rate bands can be allocated between you and you are assessed on your joint incomes. You will need to select the assessable spouse between you, which is usually the higher income earner. All filing of returns and payment of tax due is completed under the assessable spouse.

So, you want to separately assessed?

When you are separately assessed, both you and your partner are taxed as single people. Tax Credits, reliefs and rate bands can still be allocated between you, but you will both complete a single return. If eligible, the following tax credits are divided equally between you both;

  • Married or Civil Partner’s Tax Credit
  • Age Tax Credit
  • Blind Tax Credit
  • Incapacitated Child Tax Credit

So, you want to be assessed as a Single Person?

This is also known as separate treatment, where you and your partner are taxed and complete returns as single people. Tax Credits and standard rate band due as based on a single person. There is no option to transfer unused tax credits, reliefs or rate bands to your spouse or civil partner. Also, if you have children, you cannot claim Home Carer Tax Credit.

Under this treatment, if you do not use all of your personal tax credits, you may end up paying more tax as a couple than you would if jointly or separately assessed.

Need advice or a year of marriage review? Contact us on 01 539 7999 or log onto www.itasaccounting.ie and download our form.

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Capital Gains Tax Deadline – 15th December

Have you sold, gifted or transferred any assets between 1st January – 30th November 2019?

If Capital Gains Tax (CGT) is due on these, this must be paid by 15th December 2019

Payment deadlines for CGT are as follows:

  • Disposals between 1st January & 30th November due by 15th December same year
  • Disposals between 1st December & 31st December due by 31st January the following year

How do I know if CGT is due?

Firstly, you need to calculate if you made a chargeable gain on your asset. CGT is calculated on the chargeable gain only and not the full amount you receive and is calculated as follows:

Chargeable gain = disposal price less purchase price & costs

There are various expenses, exemptions and relief available from CGT, which you should seek advice on in preparing your CGT return. Each individual is entitled to a personal exemption of €1,270 for each tax year, any gain over this threshold is subject to Capital Gains Tax. Some allowable expenses can also be deducted from the sale of an asset such as; enhancement expenses or professional fees i.e. solicitor.

What if I made a loss?

If you have made a loss on the disposal of an asset, you can carry this forward to be offset against any future gains. You should still file this loss with Revenue Commissioners to place it on record.

When and how do I file CGT?

Your CGT payment is due on the above deadline dates. However, the figures involved in reaching your CGT liability is required to be included in your Income Tax Return by the 31st October the following year.


Have a question on CGT or need assistance? Should you have any queries on this issue, please contact us on 01 5397999 or info@itasaccounting.ie

Please note this article is for information purposes and does not constitute advice. Details correct at time of publishing.

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Flat Rate Expenses to be abolished from 2020

Do you qualify for Flat Rate Expenses in relation to your profession?

Flat Rate Expenses are employment expenses claimable depending on the profession you are in.

Revenue have undertaken a review of these and despite opposition from many trade unions they will be withdrawn from 1st January 2020. If you qualify for flat rate expenses, you can still claim these for the tax years 2015 – 2019.

Please note the 2015 tax year must be claimed by the 31st December 2019. Ensure you claim this entitlement while it is still available to you.

A list of qualifying professions are available here; https://www.revenue.ie/en/employing-people/employee-expenses/flat-rate-expense-allowances/index.aspx


Why not avail of our ClaimMyTaxBack.ie service for PAYE only?

We can review the last four years for you and calculate if you are entitled to a refund for any of those years.

This review is undertaken on a No Refund/No Fee basis. Therefore, if you are not due a refund, no fee applies.

If a refund is due, our fee is 10% of your refund (minimum of €35) per year.

Should you wish to avail of this service, please request an application form at taxback@claimmytaxback.ie or visit our website www.claimmytaxback.ie


While you’re here…why not read our recent blog, on claiming your tax back for the year 2015 by 31st December 2019 deadline

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