Hi there I am new here and need some advise. I have looked at revenue.ie and can't seem to find answers I need. I was PAYE worker until March this year when an opportunity came to buy out 50% of the business I worked for. This was a very good opportunity I couldn't turn down. I have not had time to get accountant yet as have been flat out with business. So am hoping for a little help here.
First I want to know do I need to in form revenue of change from PAYE to self employed?
Secondly I want to know can my OH(PAYE worker) claim my tax credits and all the cut off point which at the moment for a married couple is 41800 I think. I know I am not entitled to a PAYE tax credit.
Finally am I liable to pay tax this year or will I not have to pay until Oct 2013?
Is the business a company or are you now engaged in a businss through a partnership?
If the business is a company and you are either an employee or director PAYE still applies any salary payments you take from the company. PRSI and USC will also apply. The approrpriate rate of PRSI (A1 or S1) is another matter and used to be simple.
If the business is a partnership (i.e. not incorporated as a company) then you are most likely in the self employed category. If you only bought into the partnership from March 2013 then this is year 1 of your trade. The commencement rules apply and you will be liable to tax on the profits made between that date you commenced and 31 December 2013. Tax etc will be due for payment by 31 October 2014 and this is also the filing date for your tax return. Electronic filing will give you slighly longer.
Additionally as this is your first year trading you are given an extra 12 months to file your first tax return - 31 October 2015 may be available. Be very careful with taking the extra 12 months as you could find yourself with three tax liabilities to pay at once. I would suggest that you get an accountant to assist you with years 1 & 2 as it is tricky.
For 2013 you will get a full PAYE tax credit (regardless of whether you are in business through a company or a partnership). You can transfer some tax credits and the standard rate off point to your wife - call the Revenue and they will guide you throught the process.
Thanks for all the info.... Its a partnership and I am one of the directors.It was a good opportunity for me and I had to grab it so now I'm trying to get my head around everything tax wise. Main issue is around my tax credits so I will give them to the Mrs.