Using ROS for the 1st time

J

Julius

Registered User
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65
Just now using ROS for the first time. I was on the Back-To-Work-Enterprise-Scheme until last year and now am no longer in receipt of any DSP payments. The business I now run earns me less than €10k. Clearly I hope to increase that in the coming years. I'm a sole trader employing nobody. Parents deceased and last year I paid CGT on sale of parents house. Amount inherited is under the threshold and no qualifying gifts in the past, so I've no CAT liability. However, after I've completed my Form 11 on ROS I'll then complete the IT38 form (CAT). I won't tick the box for CAT on my Form 11 return because the date of death was the previous tax year i.e. 2016.

The main bulk of the business I get is booked via agents and so I invoice for them. Very occasionally I get a direct booking (via referrals) and so I'm paid cash for these. The only cost that I claim for is the annual membership for an industry association (it gives me insurance cover). So I know my gross income, and deducting the membership fee gives me my net income.
20% tax on my net income is less than my personal tax credit of €1,650. So I think I'll only have to pay the €500 PRSI.

I'd appreciate any general advice. In previous years (I've been working at this since my previous career ended a few years ago) I just went into the Revenue Office and filed my return with their help.
 
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Although I've no CAT liability I still must submit a CAT return (IT38). The date of death was 2016 but Probate wasn't granted until late 2017. I assumed I'd be submitting the IT38 for the 2017 tax year but the following appeared on the Form 11 on ROS and it seems that I need to submit it for the 2016 tax year.

If you received a gift or an inheritance in 2017, tick in the box

Note:
1. Where the value of a gift or an inheritance, when added to the value of prior aggregable benefits (if any) received on or after 5 December 1991 within the same group, exceeds 80% of the relevant threshold, a Capital Acquisitions Tax return must be made.
A gift is treated as having been received on the date of the gift. An inheritance is generally treated as having been received on the date of death of a person.
The completion of this section does not satisfy a requirement to file a Capital Acquisitions Tax return (Form IT 38).
2. A gift is treated as having been received on the date of the gift. An inheritance is treated as having been received on the date of death of a person.
 
Hi Julius,
I'm no authority on taxes to say the least, but:
  1. I think you should tick the box for CAT on your Form 11 as the relevant date is the date of Grant of Probate (late 2017 you say) as the estate could not be distributed until then.
  2. If you're net earnings for 2017 were >€5k then you'll have to pay the €500 PRSI.
  3. I may be wrong but I don't think you need to return the IT38 Form but only the IT38s Form (i.e. the short IT38 form) as you are below the threshold and if Revenue want to check the details they can look at the CA24 form you submitted for Probate. I recommend that you should complete the IT38s Form for the tax year 2017. If the inheritance was house plus other property (eg. savings, shares etc) just tick the boxes for both Real Property and Other Property. Then enter date of death as the Date of Inheritance and the date of grant of probate as the Valuation Date.
 
Thanks Prosper, I've just done exactly as you said. ROS is great, it made completing both forms so much easier. I couldn't believe how much easier the IT38s form was to complete compared to the long IT38 form. Thanks for reading through my posts above and picking out what was important.
 
You're welcome Julius. I notice that you said that the only expense you use to reduce your gross profit is for membership of an industry association. You could probably reduce it further by claiming additional expenses. For example you say that you invoice for most of your business and I'm guessing that most of the business is requested via email. So maybe you could claim for depreciation for the computer cost and claim for the full cost of Microsoft Office. Do you work from home, if so then could you claim for your electricity bill? Could you claim for bank charges? Don't beat yourself up if you haven't claimed expenses that you could claim. Your level of income is at a level that really it wouldn't make much difference to you. However, no doubt you'll grow the business in future years so it's worth clarifying which expenses you can claim for in future.
 
Prosper said:
Don't beat yourself up if you haven't claimed expenses that you could claim. Your level of income is at a level that really it wouldn't make much difference to you.
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You've guessed correctly. I'm embarrassed to say that I earned less than €5k. My claiming the membership fee brought it just under the 5k and this made the €500 PRSI payable amount disappear - yippee!! I'll look into claiming for the depreciation on the computer but I don't think I'll attempt to claim for my electricity bill as I think that would be pushing it, unless they will allow for a % of it. Ditto on the bank charges. Thanks again.
 
Julius said:
My claiming the membership fee brought it just under the 5k and this made the €500 PRSI payable amount disappear - yippee!!
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Be aware that this will mean that you have no PRSI contribution for the year which may be an issue when you come to claim the old age pension.

I don't think I'll attempt to claim for my electricity bill as I think that would be pushing it, unless they will allow for a % of it. Ditto on the bank charges. Thanks again.
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If you're working from home you can claim a percentage of the electricity bill in line with the amount of the bill that relates to business use. Obviously this will require some estimation.
 
Ciru75 said:
Be aware that this will mean that you have no PRSI contribution for the year which may be an issue when you come to claim the old age pension.
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I'm glad I prefaced my comments with:
Prosper said:
I'm no authority on taxes to say the least,
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Sorry Julius, I know you've already filed your return but you should probably check this out with Revenue. You should also get onto Social Welfare regarding where you stand regarding the OAP. Your first post says that you had been on the Back to Work Scheme. Although you are no longer in receipt of payments you may find that you're effectively being punished for going on the Back to Work Scheme. Even though your not in receipt of any payments you should check if you can continue to sign on for the credits towards the OAP.
 
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