Which tax credit to claim when moving from company director to PAYE

[John Locke]

Hi,
In Summer 2021, I wound up my limited company and took a PAYE job (I had previously been contracting)
I need to submit my form 11 for 2021, and I'm not sure which tax credit I should claim for 2021. I had been claiming Earned Income tax credit prior to this, but as I was both a company director and a PAYE employee in 2021, do I claim Earned Income or PAYE tax credit or both?

Also, my wife started a part time freelance job this year. I presume she will need to pay preliminary tax for 2022. We are jointly assessed.
Does the preliminary tax go somewhere in the form 11? Or is it done separately?
I have done some googling but can't seem to find the answers.

Thanks in advance!

 

[AAAContributor]

I'm not sure which tax credit I should claim for 2021. I had been claiming Earned Income tax credit prior to this, but as I was both a company director and a PAYE employee in 2021, do I claim Earned Income or PAYE tax credit or both?

Assuming your employer in your new job applied the full credit of €1,650 in the payroll against the tax on your salary for 2021, then you do not claim the Earned Income Tax Credit for 2021. See Section 3 here:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-44.pdf

Also, my wife started a part time freelance job this year. I presume she will need to pay preliminary tax for 2022.

If 2022 is the first year your wife is a self-assessed payer, then she has a choice to pay preliminary tax of 100% of last year's liability (i.e. nil) or 90% of the tax due for 2022. See here:

What is preliminary tax?

This page utlines what preliminary tax is.

www.revenue.ie

 

[John Locke]

Thanks AAAContrubutor, good to know about tax credit.
On preliminary tax, I had read that info before. My instinct would be to pay tax now rather than waiting for next year.
We know roughly what her income will be for the year, so how do we figure out what to pay? Is it just income tax? What about usc and prsi?
I hoped you could put in income and it would tell you what to pay. Have to say, I find the revenue info light on details for this!
Would it be easier for us to pay nil this year?
She is also wondering about prsi, with regard to stamps towards contributory state pension. Does anyone know how that works for freelance/ sole traders?

 

[AAAContributor]

What about usc and prsi?

Preliminary tax would include USC & PRSI too. See section 3 here:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-41/41-00-28.pdf

She is also wondering about prsi, with regard to stamps towards contributory state pension. Does anyone know how that works for freelance/ sole traders?

Have a look at this guide:

https://assets.gov.ie/38671/0aa2cf3d831a4076b1b6208e1287d9f9.pdf

Your wife will most likely be paying Class S PRSI on her self-employed income and Class S is reckonable for the contributory pension.

 

[John Locke]

Thank you again AAAContributer.
I'm still struggling with this

The Pay and File system provides the facility for you, on a single due date – 31 October, to:  Pay your Preliminary Tax for the current year,  File your tax return and self-assessment for the previous tax year, and,  Pay any balance of tax due for the previous year.

Are the preliminary tax payment and form 11 in fact separate? You file your form 11 for 2021 and separately to that, you make a preliminary tax payment for 2022.
And they don't provide a calculator for this? I was hoping there would be a box on the form 11 for this, and it would tell me what to pay.
Say my wife's income for 2022 is estimated at 20k, how would I figure out what is due?

Also:

You must advise your local Revenue office when a source of income (other than PAYE income) commences. Some tax registrations can be done online using Revenue’s eRegistration service available on Revenue’s website at Manage your tax registrations.

She has not done this yet, but then we have already been filing joint tax returns for the last number of years, because of the limited company. Does that make us already registered for income tax, and self-assessed?