Personal Taxation

PAYE stands for Pay As You Earn. The PAYE system is a method of tax deduction under which a person’s employer calculates the tax due and deducts it each time a payment of wages, salary, etc. is made to an employee, and a method of collecting PRSI (Pay-Related Social Insurance).

With effect from 6 April 2001 Tax credits replaced tax-free allowances. Under the tax credit system, you are entitled to tax credits depending on your personal circumstances, e.g. married person’s tax credit, employee (PAYE) tax credit, etc. These tax credits are used to reduce the tax calculated on your gross pay. Tax credits are non-refundable. However, any unused tax credits in a pay week or month are carried forward to subsequent pay period(s) within the tax year.

You may be entitled to claim various credits and reliefs to reduce the amount of tax you pay e.g. you may be entitled to credits if you pay bin charges, trade union subs or rent in respect of private accommodation or incurred expenditure on medical expenses including non routine medical and optical benefit.

If you are a PAYE tax payer and you earn non PAYE income, if this income exceeds €3,175 p.a. you are required to register for Self Assessment

Timetable of Important Dates in the Tax Year for Self Assessment persons

January
Pay any Capital Gains Tax due on disposals made in the later period 1st December to 31st December in the previous tax year by 31st January.

August
File your tax return for the previous tax year, if you wish Revenue to calculate your final liability before Pay & File due date (31st October), by 31st  August

September
Pay & File Payment Reminder letters will begin to issue. This serves as a reminder that: –

– Payment of Preliminary Tax for the current year of assessment, and
– Payment of Balance of Income Tax for previous year, must be paid by 31st October.

October
– Pay current year Preliminary Tax by 31st October
– File your tax return by 31st October. Failure to send your completed tax return by this date will result in a surcharge (5% where the return is submitted within two  months, otherwise 10%) being added to your final tax bill
– Pay balance of tax for previous year by 31st October
– File Capital Gains Tax return for previous tax year by 31st October

December
Pay any Capital Gains Tax due on disposals made in the initial period 1st January to 30th November in the current tax year by 15th  December (in the same tax year).

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E.W. Levingstone & Co. – Accountancy – Taxation Advice – Taxation Consultancy – Wexford, Waterford, South East