Inspector of taxes warns PAYE education sector employees re undeclared income < €3174

[oysterman]

Saw a copy of a letter from an inspector of taxes warning PAYE employees in the education sector re undeclared income.

It mentioned something about the need to declare such income in excess of c.€3100 (can't remember exact number) on the basis that the €3100 would be "coded against PAYE income" (again I can't remember the exact form of words).

What does this mean? Can the taxpayers involved earn as much as that from non-PAYE sources and really have no tax liability? It seems extraordinarily high. And remarkably unjust. Why?

 

[mandelbrot]

It means that a PAYE taxpayer who has <€3174 of self employed income can return this income without having to register as self employed. It means they can still just get a P21 balancing statement every year, rather than having the hassle of preparing accounts, filing a form 11 etc...

So, there's no free lunch, don't panic! However, whether or not the majority of people giving grinds etc.. are actually declaring this income, that's a different kettle of fish entirely...

 

[Gervan]

The tax credits allocated to the Paye job will be reduced, so the employee has enough tax deducted from Paye earnings to cover the self-employed income. This is only allowed for those who have this small amount of extra income.

Self-employed people pay preliminary tax at the start of the year, and any further liability by the following October. The Paye worker with self-employed income who has their tax credits reduced is paying the tax as they go along, rather than before.

 

[oysterman]

Thanks a million. I can rest easy knowing that there isn't rampant state-sanctioned tax evasion in the sector....