Tax return 2012 amount

Barriedata

Registered User
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3
Sorry if this is in the wrong section and I know there is a lot of variables in the answer but can anyone let me know if the amount that my accountant calculated for payment last year sounds correct.
I'm (not by choice) a director of my own limited company with my wife as the other director. I provide architectural services for a semi-state company but am paid through a 3rd party (employment agency). As I'm only providing services and not actual goods I don't have much by way of expenses to write off, only some travel.
Last year I (the Ltd company) earned approx 58k gross. After doing my accounts my accountant stated that my tax bill was approx 22k (38% of total). But that I could offset some of it by putting 13k into a personal pension I had previously set up. This left me with a tax bill of approx 16k (28% of total). This option left me with just 29k (50%) of my total earnings. While this is better than a lot of people out there, I don't know if I'm getting the best return on my earnings.

My query is that the total amount of tax is approximately the same as when I was a PAYE worker. I had assumed that as a self employed director of my own company that I would be better off tax-wise. Is this not the case?

I'm not any way literate when it comes to accounting and don't know if I'm even asking my accountant the right questions. Any help in this regard would be appreciated with regard to pointing me toward any "Irish Tax for Dummies" books or websites
 
Looks like the entire profit has been taxed as salary so that you have access to it. Does your wife have an income. Do you need all the profits to live on.

Your margin rate of income tax is 52%, the company will pay tax at 19% but the money stays in the company. It's your choice but if your are paying yourself a high monthly salary then you have to pay the tax.
 
Hi thanks for getting back.
From what understand from my accountant I was to pay myself the full profit and have nothing left in the company account at the end of the year. This was to save being charged for 2 tax bills, personal and company. I'm unclear but I don't see any reason for keeping profits in the company where I don't have access to them. The only reason for the Ltd company is so that I get paid.
My wife is a school teacher with a full time wage in excess of my own.

What do you mean by marginal rate of income tax at 52%?
If I have to pay that rate of tax, is there any way I can reduce my overall tax bill i.e. write-off expenses etc?

BTW The only reason I have the Ltd company is that I was forced into it by the employment agency and employer (if I wanted to keep working!). Otherwise I'd have remained a sole trader.