The world of self-employment is an exciting and complex one. Your self-employment journey has allowed you to follow your passions, enjoy greater flexibility and most of all the freedom of working for yourself. Being self-employed also means you have other responsibilities including managing your tax affairs and obligations. The official deadline to file your taxes in Ireland is the 31st October but if you have missed the deadline, you can also file your taxes online up until the extended deadline of 15th November.
As we rapidly approach the online deadline to file your taxes online in Ireland and if you want to avoid penalties, you need to act now. In this blog we will guide you through the self-employed tax obligations to keep your business financial affairs in order.
When you start working for yourself, you will need to register with revenue within 6 months of becoming self-employed. Failure to do this could amount to penalties. If you are trading under your own name, you can register for tax under your own PPSN. If you are trading as a business under a different name other than your own you will need to register your business name with the CRO (Companies Registration Office) and register your business for tax.
Self-employed individuals are subject to income tax on their earnings the same as a PAYE employee but being self-employed means you are also responsible for calculating and paying your own tax through the pay and file system once a year.
You will be required to register for VAT or Value Added Tax if your income and business activities are over a certain threshold. The VAT thresholds are €75,000 for the supply of goods, or. €37,500 for the supply of services. This can add an additional layer of complexity to your business financial management.
Online Tax Deadlines
Ireland’s tax system is becoming increasingly digital, with many self-assessment tasks and deadlines managed online. Here are some of the most important online tax deadlines you need to be aware of:
If your annual income exceeds a certain threshold, you may be required to pay preliminary tax for the upcoming year. This payment is typically due by 31st October.
Pay and File
The self-assessment tax return, also known as the Pay and File system, is a crucial deadline. You must file your return and pay any tax owed by October 31st or by 15th November if filing and paying online.
If you’re registered for VAT, you’ll have specific deadlines for filing VAT returns and making payments. These deadlines depend on your VAT period, which is usually every two months.
Relevant Contracts Tax
If you work in the construction, meat processing or forestry industries, you’ll have RCT obligations, including the filing of monthly RCT returns.
Becoming self-employed means you are solely responsible for your financial obligations and The most important thing to remember when dealing with taxes as a self-employed individual is to stay organised and keep your financial records in order to avoid hefty penalties but you don’t have to go it alone, talking over your responsibilities and tax obligations with a trusted financial advisor can help you stay on track.