Form 11 section 112 Self-employed & PAYE income - relief for losses

[Harlequin]

First time filling in the Form 11 - need some guidance!

I'm filling in the paper form because the computer on which I had registered my certificate for ROS broke down yesterday so I'll be doing all calculations myself.

In 2009 I had PAYE income up to September 2009, earned a salary, paid tax and PRSI etc.

In October 2009, I became self-employed for the first time - I'm a sole trader.

Total expenses incurred in the new profession in 2009 were E3060 - subscription fees and professional indemnity insurance.

I had no income from my self-employed profession for the remainder of 2009. (This is quite normal starting out in this profession).

My (very simple) profit and loss statement for 2009 would therefore indicate a loss of E3060. Is this correct?

In s. 112(a) of the Form 11, it indicates that I can set any loss in this trade made in the year 2009 against my other income under s. 381 of the Taxes Consolidation Act 1997.

Do I just fill in my loss of E3060 in this section and include it in my overall calculations as per the Guide to Completing 2009 Pay and File Returns? Is there a downside to setting this loss against my 2009 income?

Thanks for your help.

 

[Joe_90]

As both of these expenses are for 12 months you should have an prepayment of 9 / 12 of both at 31 December 2009.

You do not have to make a return until 31/10/11 if your commencement was in 09. You could then consider if its better to use the loss in 2009 or prepare accounts for 12 months to 30 Sept 10.

 

[Harlequin]

Hi Joe, thanks for your reply.

I'm filling out the Form 11 now because Revenue told me to do it this year.

I'm afraid don't understand what your first line means - I haven't prepaid anything.

Could you clarify it for me? Sorry, I'm very confused over the whole thing.

 

[papervalue]

Hi Joe, thanks for your reply.

I'm filling out the Form 11 now because Revenue told me to do it this year.

I'm afraid don't understand what your first line means - I haven't prepaid anything.

Could you clarify it for me? Sorry, I'm very confused over the whole thing.

A basic example of a prepayment is say Insurance for 1000 euro

Accounting year: 01/01/09 to 31/12/09



A person paids annual insurance on 30/06/09- So 1000 paid 30/06/09 but you year end is 31/12/09 so 1000*6/12= 500 allowed against 01/01/09 to 31/12/09 while next 500 will go against accounts 01/01/10 to 31/12/10

1. 1000 goes into pl on 30/06/09 say from bank cheque
2. them journal done dr prepayment 500 credit insurance 500 leaving a 500 charge for insurance for year
I would keep any loss for the future

So if you paid somthing in say 01/10/09 and accounts to 31/12/09- Allowed claim for 3/12 and prepay 9/12

 

[T McGibney]

As both of these expenses are for 12 months you should have an prepayment of 9 / 12 of both at 31 December 2009.

You do not have to make a return until 31/10/11 if your commencement was in 09. You could then consider if its better to use the loss in 2009 or prepare accounts for 12 months to 30 Sept 10.

It would be much better, in my opinion, to prepare 15 months accounts to 31/12/10, and submit Form 11 2009 (representing 3/15 months income) and Form 11 2010 (representing 12/15 months income) at the same time, sometime between January and October 2011.

 

[dandecombine]

Ha! Memories of this...I think I know precisely what profession are you in - i.e. large expenses for your first schedule D year being between October and December and very little in. Don't forget that things which last a long time may not be revenue expenses, but capital expenditure such as funny looking cloaks.

Your loss is very typical losses for nearly everyone who is in your particular boat but you should look into the fifteen month return as the last post indicated. There are advantages to this such as (I think) the double counting of the loss you refer to as expenses, but I am not sure as to the precise details.

Honestly, consult an accountant on this and (if I'm right about what you do) you'll have lots of free advice sessions advertised around your place of work.

Your loss is only a Schedule D loss, so don't forget that either.