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From Accountingnet.ie In Practice
Most self employed people pay all of their tax in one lump sum in October or November every year. The deadline is 16th November 2009. The preliminary tax that they pay in October / November 2009 is based on the lower of their profits in 2008 or their estimated profits for 2009. In a sample of self employed tax returns spread across the country, ACCA practicing members reported that on average their clients profits are substantially lower in 2009 and their tax bill is also correspondingly lower. Reductions of an average of 50% were reported in some practices ; with 30% being the average for all of the participating practices. All of the practices reported that they had clients who simply could not afford to pay any tax, so although the amount due is on average down 30%, an increase in the amount of taxpayers seeking an instalment plan to pay their tax underpaying their preliminary tax for 2009 will further reduce the tax yield. Underestimated preliminary tax will have to be made good in October 2010 and interest will be charged on the shortfall. Aidan Clifford, ACCA’s Advisory Services Manager, said “The sample of ACCA members working in practice reported that, even with higher tax rates and income levies, their clients are paying on average 30% less tax in October 2009 compared to 2008. A small number of self employed clients were reported to be paying more tax, particularly clients relying on property investment tax shelters or self employed people in certain sectors of the economy, but this is being offset by clients getting tax refunds due to current year losses.” The reduced tax yield will be repeated in 2010, as the amount of tax paid in October 2010 will be based on the lower of the profits in 2009 or 2010. The Minister for Finance will be faced with at least two years of reduced income tax yield. © Copyright 2005 by Accountingnet.ie |
