SELF ASSESSMENT – The Tax Fairy

What is Self-Assessment?

Self-Assessment is a system which gives you greater control and responsibility over your tax affairs. It applies to people chargeable to Income Tax who are in receipt of income from sources which are not chargeable to tax under the PAYE system or where some but not all of their tax on these sources of income is paid under PAYE.

Self-Assessment applies for Income Tax purposes to: Self-employed persons (i.e. people carrying on their own business including farming, professions or vocations) Persons receiving income from sources where some or all of the tax cannot be collected under the PAYE system, for example: profits from rents, investment income, foreign income and foreign pensions, maintenance payments to separated persons, fees, profit arising on exercising various Share Options/Share Incentives.

Under Self-Assessment there is a common date for the payment of tax and filing of Tax Returns, i.e. 31 October. This system, which is known as “Pay and File” allows you to file your return and pay the balance of tax outstanding for the previous year at the same time.

Under this system you must:

Pay Preliminary Tax for the current tax year on or before the 31 October each year, make your Tax Return after the end of the tax year but not later than the following 31 October. This is known as the “specified return date”. pay any balance of tax due for the previous tax year on or before 31 October pay any Capital Gains Tax on disposals made between 1 January and 30 September of the current tax year.

1How do I register for Self-Assessment?

You should advise your Revenue District office when the source of income commences. You can do this by completing Form TR1. This registration form is for an Individual/Sole Traders, Partnerships, Trusts or Unincorporated Bodies requiring registering for: Income Tax, Employers PAYE/PRSI, VAT, Relevant Contracts Tax (as a Principal Contractor). You should also register for PRSI with the Department of Social and Family Affairs by completing Form SE3. Once registered for tax purposes you should access the Revenue On-Line Service (ROS) through Revenue’s website www.revenue.ie and familiarize yourself with the many features of ROS as it is the most effective way for you as a Revenue customer to deal with your tax affairs.

2What Tax Number will I use?

If you have paid tax previously you will keep the same tax number. This number is known as your Personal Public Service (PPS) Number. You must enter this number on your tax registration form (Form TR1). If you do not have a PPS Number you must first register with the Department of Social and Family Affairs. To register with that Department you should: call in person to the nearest or most convenient Social Welfare Local Office or Social Welfare Branch Office, complete a PPS Number application Form REG1, and present documentary evidence as requested on the application form to verify your identity. You will be notified of your PPS Number by the issue of a Social Services Card. Leaflet SW100 ‘Personal Public Service Number’ issued by the Department of Social and Family Affairs gives further information on how to register for your PPS Number. The leaflet is available from your Social Welfare Local Office and on the Department’s website at www.welfare.ie Your PPS Number is very important so you should keep a permanent record of it and always quote the number when contacting your Revenue office. You can now not apply for a PPS number until you are in receipt of a job offer. Contact us for more information.