Confusing Tax Issues

L

living

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Hi,

I have a bit of a longwinded issue. Hope you can bear with me.

I'm a PAYE employee who has an investment property.
Last year for the first time I filled out a Form 12 for 2005 which included details of the rental income received. I sent off a cheque with this form the tax due on this income.

I also submitted a Form 12 last October for 2004, one year late I know but I only had the apartment let out for 2 months in 2004 and as such a loss was made. I didn't realise I had to declare this at the time due to the fact that a loss was made.

A few weeks ago I received a pay and file reminder looking for preliminary tax for 2006 (which apparently should have been payed by October 2006). When I phoned up I was told that this is normal practice and would have been clearly stated on the Form 11 that I submitted. Didn't think too much of this at the time on the phone but subsequently realised that I never filled out a Form 11, and on the Form 12 there was no mention of having to pay preliminary tax.

Does anyone know what form I should have submitted? The Form 12 was never rejected. Because of this should I have had to pay preliminary tax for 2006?

I have since also received two subsequent requests for income tax, one for 2004 and one for 2005 which they claim I owed after they had balanced everything out. Both of these outstanding amounts appear to be from the Paye portion of my tax and not from the rental income, however two phone calls to revenue customer service have resulted in two different responses. Neither person could explain the figure, which if valid, would have been a mistake made by my employer.

As a result of this I sent a letter querying the charges to the Collector General over 6 weeks ago (as it stated to do so on the invoice). My cheque was cashed immediately but no response to the letter has been received from revenue.

I guess what I'm trying to say is that since filling out my first ever tax return I have had nothing but hassle. I don't know where I stand, where the extra charges have come from and why I'm supposed to be paying preliminary tax.

If anyone has any answers or suggestions I would be grateful!
Apologies for the very long post.
 
Re: Confusinf Tax Issues

I can't answer your question but if you decide to consult an Accountant, I read on AAM a while ago that the cost could be put down as an allowable expense since it's to do with an investment property. This is not the case with purely PAYE claims. Maybe others can confirm if this is correct.
 
thanks for the suggestion however the cost of the accountant would more or less wipe out any profit from the rental income
 
If you are letting Revenue calculate your tax bills for you without any understanding of how they arrive at their figures, there is a strong chance that you may not be receiving all credits, reliefs and deductions to which you are entitled. If you are failing to comply with preliminary tax obligations you are running a risk of being hit with interest charges and greatly shortening the odds of your tax return being selected for Revenue audit.

If your rental profit is no more than a typical accountant's charge (approx €500 pa) you should not be paying much tax on this income in the first instance. It is quite likely that a professional review of your tax affairs could identify tax savings, possibly outweighing the cost of the accountant's fees, This should also eliminate the hassle that is bothering you at the moment.
 
the cost of the accountant would more or less wipe out any profit from the rental income
Click to expand...
Or they could save you more on penalties and interest possibly in the long run. Weigh up the odds if you dont get a definitive answer here over the next few days. I suggest maybe for this first part you employ an accountant to at least sort out this for you. (I'm not an accountant btw).
Edit : Post crossed with ubi.
 
Agree with getting the advice-you may have no tax to pay, but you still must file a return
The form is Form 11 and since you commenced rental this is what should have happened
04 Register for self assesment. File Zero return.
Oct 05 File Form 11 and pay balance tax on 2004 profit plus prelim tax for 05
Oct 06 File Form 11 and pay balance tax for 05 and prelim tax 06
Oct 07 File Form 11 and pay balance tax for 06 and prelim tax 07
 
An individual who is in receipt of income chargeable to tax under the PAYE system and who is also in receipt of other income from other non-PAYE sources (e.g. rental income) should not be within the self assessment system once the total gross income from all non-PAYE sources is less than €50,000 and the net profit on the income is less than €3,174.

A Form 12 is the only form required and any liabilities should be collected by reducing your PAYE tax credits.

You should request to be removed from the self assessment system.

Corcaioch
 
Hi all,
Thanks for all the responses.
Corcaioch where did you get that information from?
Thanks
 
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