When must a PAYE taxpayer make a return.

R

Robo

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My understanding is that a PAYE taxpayer is only obliged to make a tax return when requested to by their Tax Inspector. Is there a requirement for an individual to make a return (Form 12) if they are in receipt of dividends from shares. As I understand it 20% tax is withheld at source. Is that the full tax liability?

Thanks
 
Not as far as I know. Chances in circumstances can normally just be notified to Revenue by writing to them or (where applicable) filling in the relevant form and having your details updated that way. I don't know of any need to file a Form 12 return unless you need to significantly update your tax affairs or Revenue ask you to return one.

Dividends may be paid net of witholding taxes. In Ireland the witholding tax is 20%. In other jurisdictions it may be different. Dividends are subject to income tax at your marginal rate (0%, 20% or 41%). If you pay not tax normally and dividend income doesn't push you into the tax net then you can claim the witholding tax back. If you pay income tax at 20% then Irish witholding tax is the full extent of your income tax liability. If you pay tax at 41% then you get a credit in respect of the witholding tax and have to pay the balance of 21%. You need to declare dividends one way or another but a Form 12 may not be necessary.
 
for the past number of years I have a small deduction made in my tax credits in respect of credit union interest. this year I decided to sort it out so I requested a statement from the CU showing interest and tax deducted for 2005 and 2006. got two p21s this morning for both of those years. and the revenue have added the interest earned to one column and the tax pax to another. so far so good. but in computing the tax they have effectively taxed this interest at 42%. ie in arriving at their figure for tax paid and tax due they have included this interest in the taxable amount over 20%.So much for trying to sort it out! ( they worked out I owed around €80 for both years but stated they were not going to collect it- but if the interest was computed at the correct rate this amount owed would but be practically zero anyway)
 
Thanks Clubman.
You need to declare dividends one way or another but a Form 12 may not be necessary.

This is probably a basic question for those who know. How do I declare a dividend with out a Form 12.

Thanks again.
 
If that was the only additional tax issue that I had (i.e. that was not automatically taken care of by PAYE) the I would just write to Revenue with details. I generally take that approach with changes in circumstances and it has always worked for me.
 
ClubMan said:
If that was the only additional tax issue that I had (i.e. that was not automatically taken care of by PAYE) the I would just write to Revenue with details. I generally take that approach with changes in circumstances and it has always worked for me.
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Yes, I agree. That has been my approach since I started having small dividends in 2000. Send a letter and a cheque.

Unfortunately, for 2005 I had stock options that exceeded a certain limit, and now I have to do a form 11 return for 2005... Revenue returned my letter in January along with a form 11 and asked me to complete it, though they cashed my cheque.

Anyhow, as long as your dividends are small a letter should be fine.

Ix.
 
Yeah - see [broken link removed].
A PAYE employee who exercises a share option and pays Relevant Tax on a Share Option will be registered as a self
assessed person for the tax year in which the share option is exercised. A Return of Income will be forwarded after the end of
the tax year and the Return should be completed with details of all taxable income for the tax year, including the gain on the
share option.
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However they seemed to change this recently and allow for those who earned less than c. €3K in non PAYE income to opt to have the liabilities dealt with through the PAYE system (e.g. through an adjustment to tax credits). I fell into the same categoty but never received any Form 11 (yet!) and also wrote to them asking for the matter to be sorted out through the PAYE system but they never replied! They did cash my cheques too and sent me receipts for the ESPP income tax payments.

See also this thread:

Does my ESPP make me self assessed?
 
Protocol said:
Credit unions pay dividends.

Dividends are taxable at your higher rate.
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the credit union statement clearly showed it as interest and tax deducted. I was in the tax office on another matter and pointed it out the official on duty that day. she stated that 'interest is taxed at the hightest rate of tax' I queried this and she rang some other official and was informed that I was correct. to be fair she then asked why it was shown on the p21 as it was if this was the case and was informed that it was entered under the wrong code. the reason I brought it up at all is because I received a lump sum payoff on retiring and have invested it in rabo and fnbs ( cooling off period while I decide what to do with it) and don't want this error occurring again next year. one thing being told you owe €40 in tax not collected , different if you are informed you owe up to €1,000 through their mistake.

seperate query: anyone remember the cut off points for two incomes in 2004?
thanks
 
thanks Domo: confirms what I thought. same trick again from revenue. everything over the 56,000 is lumped in at 42%. this includes credit union, fnbs. ebs and also interest I have earned in uk with a deduction of 20% already made. nice little earner for the revenue this method of calculating tax. not much point in advising us if we have made all claims we are entitled to ie bin charges etc when they lump everything else into the incorrect bracket. ie my wife earned €17,000 in 2004. and she also received dividends from boi for around €300. but the tax has lumped these dividends into my column. also she was sick for about 8 weeks that year before she had to leave her employer. I was under the impression that the first 6 weeks were not taxable but you wouldn't know this from examining the p21. its all taxed. last time I got involved with something like this was with BT over broadband charges and it took ages to sort but in the end I did. looks like another long haul here.
 
ClubMan said:
41% in 2007.
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thanks CM
Sufficient for today the evil therof ( or words to that effect)

trying to sort out 2004 ,2005 and 2006 first. Actually I had just glanced at the p21 for 2004 and more or less accepted it until they 'missed' that refund of almost €1,000 due to me for 2006. I looked again and 2005 and 2004 and lo and behold all interest is at 42% including the interest from abbey national on a uk loan note I got from the scottish prov demut.
also must find out for definite if mrs cu's first 6 weeks disability in 2004 is tax exempt before taking that further.
I think this is my best option: wait for the 'amended' p21 for 2006 with the refund due. I have absolutely no doubt that the 'underpayments' of 2004 and 2005 will now be deducted from this refund. When I have the three p21s ( 2004,5,6) write to my local tax inspector raising the question of whether the interest earned and ( and dirt deducted) was incorrectly taxed at 42%. raising the question of the uk interest ( tax deducted at source @20%) being taxed at 42% and raising the question in relation to 2005 and 2006 of mrs cu's boi dividends being included in 'my' column and not hers. in neither year did she reach her cut off point so the tax witheld on the dividends should also have been full and final tax. but as it was lumped into my earnings it was also taxed at 42%.( or am incorrect on this - maybe her personal cut off point doesn't apply to dividends?)
 
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