Updated on 15 Oct 2020 by Accountant
Self-employed people/Company directors
When a sole trader starts a business, he/she is legally obliged to register with Revenue for Income tax.
A company director who own more than 15% of an active trading company is obliged to register for Income tax and submit an Irish Income tax return each year, even though his salary is processed through PAYE (payroll) system.
Before you register for tax, you must have a Personal Public Service Number (PPSN). Your Tax Reference Number will be the same as your PPSN. Your PPSN does not become your Tax Reference Number until you register for tax.
You can register for Income tax online through Revenue’s eRegistration service. You can access the service:
- in myAccount or,
- using Revenue Online Service (ROS).
Non-resident sole traders must complete a paper Form TR1 (FT) to register for Income tax.
Income tax return
You are paying income tax (and preliminary tax), USC and PRSI (social welfare taxes) once a year through your Income tax return (form F11).
Deadline for filing this return, paying preliminary tax and balance of tax is 31st October each year. If you pay and file through Revenue Online System (ROS), deadline is extended till 13th/14th November.
Due to Covid-19, the deadline for Income Tax Return for 2019 is extended till 10.12.2020 for ROS customers.
Example: If you have accounting period ending 31st December 2020, you need to file your tax return, pay preliminary tax and balance of tax by 31st October 2021.
|Profit and Loss AccountPrice: €3|
You need to register your new company for Corporation tax and PAYE (as an employer) after you have registered the company with the Companies Registration Office (CRO) and received its CRO number.
Each year you need to file Annual Return (form B1) CRO by 28 days after company’s Annual Return Date (ARD).
Corporation tax return
You have to file the Corporation tax return (form CT1) and the balance of tax by 8 months and 21 days of the end of the company’s accounting period. If you pay and file through Revenue Online System (ROS), deadline is extended till 23rd.
Example: If a company has an accounting period ending 31st December 2020, then Corporation tax return (form CT1) must be completed and submitted to Revenue by 21st September 2021 (23rd September 2021, if filing and paying by ROS).
|Balance Sheet and Profit and Loss Account
New or Start-up companies don’t need to pay Preliminary tax for their first accounting period, if their corporation tax liability is less than €200,000.
Small companies (with a tax liability less than €200,000 in their previous accounting period) have to pay preliminary tax by 21st (23rd if paid by ROS) of the month preceding accounting period end month.
Example: If a small company has an accounting period ending 31st December 2020, then preliminary tax needs to be paid by 21st November 2020 (23rd November 2020, if paid and filed through ROS).
Form 46G is a third party return.
Traders, farmers, professionals, companies, charities and other businesses need to file returns to Revenue.
Basically, Form 46G is a report of all payments for services made to any person or company, which total amount for the period of 12 months is more than €6,000.
You must file Form 46G with your annual Income Tax Return or Corporation Tax return
Following deadlines are only for those who have registered for PAYE or VAT or RCT. Doesn’t matter if you are self-employed or company, deadlines are the same.
You have to register as an employer for PAYE, if you make payments to your employee more than €2 per week (or €9 per month). Best practice is to register with the Revenue for PAYE as soon as you take your first employee on board.
You do not need to register as an employer, if you have only one domestic employee and you pay him/her less than €40 per week.
A company must register as an employer and operate PAYE on the income of directors even, if there are no other employees. A director of an Irish incorporated company is liable to PAYE on any income of directorship irrespective of his/her residence or where the duties are performed.
You must register new employments. When ending an employment you must include the date of leaving on the final payroll submission and on the final payment. Before you make a payment to your employee, you must report the payroll information to Revenue.
Revenue will make a monthly statement based on the information you provided in your submissions. This will be available by the fifth day of the following month and will show a summary of the total liability for Employees Income Tax, Universal Social Charge, Pay Related Social Insurance and Local Property Tax.
Payment of your total PAYE liability must be paid by 14 days after the end of the month/quarter/year (23 days for ROS users) depending if you are monthly, quarterly or yearly remitter.
You must register for Value Added Tax (VAT), for example if your annual gross sales is more than €75,000 for selling goods, €37,500 for selling services or €35,000 for making mail-order into Ireland.
VAT return file frequency
How often you need to file your VAT return depends on your yearly amount of VAT payments. You may need to file your VAT return monthly, bi-monthly, 4 monthly, bi-annually or annually and is always by 19 days of the end of the period.
You are obliged to register for RCT as soon as you enter into a relevant contract with a subcontractor.
Principal Contractors must register for Value Added Tax (VAT) as well and account for VAT at 13.5% or 23% under the reverse charge rule.
As soon as you enter into a relevant contract with a subcontractor, you need to notify the contract to Revenue through eRCT system. Once you decide to pay the subcontractor you need to notify the payment to Revenue through eRCT. You need to deduct tax from the payment to the subcontractor according to the Deduction authorisation issued by Revenue. And finally you need to file RCT return and pay any RCT tax due to Revenue.
After the end of each period (monthly or quarterly), you need to file RCT Return and pay RCT (online) through eROS by 23rd.
Example: You need to file RCT return and pay RCT due for November period (1.11.2014-30.11.2014) by 23rd of December 2014.
There is €100 penalty if the return is made or amended after the due date. Interests will be charged for late payments made by principals.
If you are not already registered for RCT, you will be automatically registered for RCT when principal contractor will notify your contract to Revenue.
You will have to register for VAT, if your sales will be more than €37,500 in a 12 month period.
You need to give the Principal contractor your name and tax reference number to ensure that you will be credited with any RCT deducted. Check your contract notification letter issued by Revenue for accuracy when you have received it.
Books and records
You need to keep books and records relating to the business – including
records relating to the PAYE, VAT and RCT for a period of six years.
You need to pay and file returns online through ROS, if you are:
- company, trusts and partnerships,
- employers with ten or more employees,
- VAT registered persons,
- all newly registered self-employed individuals,
- individuals who avail reliefs and exemptions as follows: retirement annuity contract, PRSA contributions, overseas pension plans: migrant member relief, retirement relief for sportspersons, relief for AVCs, artists exemption, woodlands exemption, patent income exemption, income on which transborder relief is claimed, business expansion scheme relief, seed capital scheme relief, film relief, significant buildings/gardens relief, interest relief: loan to acquire share in company or partnership.
Further information on Mandatory e-Filing can be found here.