Dividing tax credits between different employers?

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Plek Trum

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Hello all, hoping for some clear advice on this please, will try keep it brief.

OH was registered as self employed, works in 4 different places, 5 days a week. Revenue has reviewed the status of their profession and decided that they (OH and colleagues) are to be treated as employees - back dated to Jan 2013.

OH was advised to strike off the company (done) and will be making payments on taxes etc due to date, all employers are happy with this.

The allocation of OH tax credits though is proving tricky. We got advice from Revenue who said they could be divided into 5th's and allocated to each employer that way (Employer1 - 1/5, employer 2 1/5, employer 3 1/5 and employer 4 2/5)
BUT
they also said it was "possible to allocate them differently which may be of more benefit to you"

OH has rung Revenue, emailed and called in in person to discuss what other alternative there is to allocating the credits as "fifths" but to no avail. They wont say how to do this or of what better benefit this could be.

Yesterday, in the actual Revenue office, OH was 'advised' to "figure it out themselves" (I joke you not!!)

Any ideas, advice or suggestions welcome - many thanks.
 
Revenue have deemed your OH to be an employee of a principle instead of his own company. I have not heard of this before.

Are Revenue saying that your OH company has to repay all the money paid since 1 January 2013. Was your OHs company operating PAYE/PRSI on his salary. Is he paying all of this back.

This seems to be an incredible amount of hassle.

Do you have any idea of how much your OH will earn with each employer?
You have two options allocate 1/5 of the tax credits and standard rate cut off to each employer simply write to them with his PPSN and the employers registration number.
OR allocate an amount to the first couple of jobs that will exempt him from tax but will pay more in the others.
 
OH operated as a self employed person of their own Ltd Co for years, Revenue have now decided their professional status meets that of employee and not self employed (have worked at the same 4 places for many many years now - 16years plus)

No 'repayment' demans from Revenue as such. The companies accounts and returns are all up to date but 2013 figures are not due yet. As the ruling has been backdated to January 2013, the employers will be held liable for the PRSI / PAYE etc that is due on OH's earnings from Jan 2013 to date. OH will be forwarding these sums to their employer(s), who will in turn be paying this to Revenue. All liabilities will then be accurate, paid in full and up to date going forward.

Hope that clarifies things (!)

Any suggestions as to the best way to allocate OH tax credits ??
 
Just to be absolutely clear, because what your describing seems pretty unprecedented, your OH is definitely trading through a Limited Company, not as a sole trader / partnership?? There is a massive distinction.
 
As far as I think so, yes. They have been guided through the process by an appointed person from Revenue who co-ordinated same and approved the transition, working from the company to employee status. Revenue oversaw each step and have been on board since the proposal came into effect (approx. 4 / 5 weeks ago, backdated to Jan 2013)

Revenue are fine with it and oversaw each step - they just don't seem too helpful in advising how best to allocate OH tax credits now. Ideas??
 
Could you answer Mandelbrots question as this has much wider implications for others.
 
Thanks guys for the information - Joe90: would you know how best to allocate the tax credits between various employers?

the "fifths" idea has been proposed and various employers are happy with this. However , if we can manage to retain as much net as possible (no matter how small the difference) it would be appreciated.

Tax credits 4,375.20

Employer A - approx. gross Jan to end Aug 12,160
Employer B - approx. gross Jan to end Aug 6,690
Employer C - approx gross Jan to end Aug 7,154
Employer D - approx gross Jan to end Aug 6,670

Any suggestions, clarity and ideas would be sincerely appreciated.
Many thanks.
 
Ok well assuming those figures will continue pro rata into the future then splitting everything in 1/5's will optimise the net pay. It's not rocket science or magic, if you split the credits/bands in the same ratio as the income you have to end up in the optimum position. Since the income is, roughly, in a ratio of 2/5, 1/5, 1/5, 1/5, then this will do the trick.

Now, quid pro quo, what feckin industry are you talking about, because what you're saying Revenue have imposed here is completely unheard of, as far as I know...?!
 
A dentist working for their own limited company. That's news to me I always understood that they could not incorporate! Hence the assumption that they were a pharmacist. The plot thickens.
 
That's an interesting development that the Revenue looked thought the ltd co. I understood that the separation caused them a problem in other cases.

Seems like an a lot of work unwinding invoices payments. Wages PAYE. Expenses payments in the company. The operating PAYE by the dentist.
 
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