Proprietary Director working as PAYE employee

K

ken v

Registered User
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Hi All,

I am new in the forum, so apologies in advance if this has been asked before.
The query I have is the following as it is my first year.

I am a proprietary director which has set up a company, and still keeps his day job.

1. I have no income from the company of which on which I am PD owning 90% (Not set himself as employee or get anything out, I am just starting out)

2. I kept working for a company as employee paying PRSI and USC at the rate that was before setting the company, same tax credits, etc.

I believe that my PAYE contributions are correct because I am entitled to the PAYE tax credit as my earnings are all incurred in my PAYE employments.

My form 12 tax return should balance my PAYE contributions. Is that correct?
On filling the first return to the revenue how much will be the return if I had no income from the company on which I am PD?

Thanks in advance to the gurus!

Ken.v
 
You have no income from this company at present. As such it should have no impact on your tax return until you begin taking an income from it.
 
Thanks a lot for your answer 44Brendan.

I forgot to add that we invoiced a value of 15K last but I had set up costs as well which I did not even retrieve (I paid them from my pocket) and I did not pay myself a salary or take any money out.

I understand that is the same case, no income therefore no impact?

(apologies if this is a basic question already answered)

Thanks in advance,
Ken.v
 
Exactly, you are making a return of your income. Unless you start paying yourself a salary from the company, then it will need to be included on your tax return.
 
Hi 44Brendan,

I found the following link, if I am understanding this correctly, from 2013 there is a minimum levy of 500 euro that applies :(

From welfare website:

"Minimum/Flatrate Self-employed Payments
• Self-employed contributors with annual self-employed income over €5,000 pay Class S PRSI at the rate of 4%, subject to a minimum payment. The minimum payment for self-employed contributors is increasing from €253 to €500."

Therefore I do not know if have to pay 500 euro or not... or does it matter?

Regards,
Ken.v
 
You are not self employed. As I understand it you have a separate PAYE employment and are a director of your company, not an employee. As a director you have several responsibilities, but none of these relate to your personal income. You will need to have an accountant explain fully your responsibilities as a company director, as a failure to make the correct returns could lead to penalties in this regard.
 
Thanks 44Brendan,

I am indeed seeking professional advice but I am checking by myself as well as I am ultimately the person liable for the whole sebang! :)

My point is, I think as director holding over 51% shares of a company I am automatically considered self employed from PRSI perspective and due to file a return, therefore even if I do not pay myself any salary I am still liable to pay the minimum prsi contribution of 500 euro.

Another key question is my PRSI class on my existing employer is changed because I am a director?

Note that PAYE is clear, no change.

Thanks for answering,
ken.v
 
As a 51% shareholder director your salary will be Class S for PRSI. You are class A in your existing employment this does not change. Minimum PRSI is irrelevant as you pay PRSI in your other employment.

Don't over think it.
 
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