Taxing time for Self Assessment

Budget 2015 may be serving as somewhat of a distraction this week however, the dark clouds are looming as the deadline for self assessment closing in on us(31st October- paper, 13th November E-filing). Self Assessment applies to people chargeable to Income Tax who are in receipt of income from sources which are not chargeable to tax under the PAYE system or where some but not all of their tax on these sources of income is paid under PAYE.

It’s only natural that you would want to research avenues of specialist tax minimization  so leaving this go to the last minute is never a good thing! And, after all why leave these tax loopholes to the rich and famous? 

Our friendly tax man was in studio yesterday to go through some of the new “hidden” penalties introduced should you decide to do your returns on line. In short, The new rules are that if you are sending in a paper tax return you must include a calculation of your tax position in a set prescribed format. If you do not you will be liable for a penalty of €250. In other words the Revenue will make you pay them €250 for calculating your tax position. 

 

Listen back to the interview here 

 

Main points from the interview; Courtesy of PayLessTax.ie 

 

New Self Assessment rules for 2013 tax returns

 

-Over half a million people in self assessment tax system

-Have to pay balance of tax owed for 2013 and make a Prelim tax payment on account for 2014

-Paper filers by the 31st October

-E-filing by the 13th Nov

-Must calculate their own tax

-Very Difficult for paper filers

-€250 fine if not completed

 

 

2.Options 

-Do it yourself

-Try and use Revenue ros system which requires a good level of tax knowledge

-Go to an accountant

-Go online with paylesstax.ie (€149)

 

 

 

3.How to save tax 

(a) PAYE Earners 

•Education on what can be claimed 

•Most common overlooked claims are:

-rent relief  20% max worth up to €400 single/€800 married home carers credit –worth €810 pa

-Employee flat rate expenses – run from circa €30 up to €700 for certain employments.

•Where medical insurance paid by employer personal tax claim must be made to Revenue for tax refund. 

•Can claim back refunds for last 4 years ie 2010, 2011, 2012 & 2013.

•If you have a company car check operation of the BIK as figures may be incorrect re off sick for long period, working abroad etc in circumstances where car not being used then reduced BIK.

 

4.Creating tax refunds

•Easier said than done? Not necessarily – advice required to ensure you are taking advantage of what is available.

•For 2013 still possible through pension funding & claim against 2013

 

 

 

5.Married couples -Income splitting to reduce impact of levies

•Spouses divide investment / rental income between them. If one spouse has low income may avoid PRSI & USC

 

6.Retired Couples

•Help from family members using deeds of covenant to transfer income from children to parents. 

 

7. Self Employed – involving family in business 

•Working from home- various expenses that can be claimed. 

•Spouse- employee or business partner if not otherwise earning to get increased 20% tax rate worth €5,750 pa

•Children – can be paid a salary for work completed and can earn up to €9,150 tax free working part time in the family business.

•Extra scope for pension funding 

 

Copyright Paylesstax.ie the easier, faster & cheaper way to do your tax returns 

 

Author Myra Hayes 

@myrahayes

The Sunday Business Show 10-11am