Why you answer these tax questions

Published Apr 15, 2000

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If you understand why the Receiver of Revenue asks you questions in your

tax return it`s easier to fill it in.

The tax return for 1999 had 18 parts to fill in. The year 2000 return could

be different in lay-out but the principles and questions will remain fairly

similar.

Part 1 is straightforward as it requires personal information

except points 1.17, 1.18 and 1.19, which are the points we`ll discuss.

These points are aimed at people who conduct a business in their own name

(for instance selling clothes from home and employing a few people to

help).

Point 1.17 asks you to state the turnover (total income before deducting

expenses from your clothes business) so that the Receiver should determine

if you are obliged to register for VAT. This part is designed to catch

those whose businesses generate revenue above a certain prescribed level

but are not registered for VAT.

The same principle applies to the salaries and wages in part 1.18. If you

employed people to help you in your business and show the total salary or

wages you pay them but you don`t include the PAYE number of your business,

you will obviously invite investigation by the taxman.

Among other things, point 1.19 requires you to state the RSC (regional

services levy) number given to you by the Metropolitan Council when you

registered your business. If your business generates revenue and employs

staff, you have to pay an RSC levy based on your revenue and the salaries

or wages you pay.

The part on labour brokers applies to people whose business it is to refer

employees to employers. Normally as an employee, tax is deducted from your

salary monthly but to avoid this a practice developed where the employees

were employed as consultants so that their salaries would not be taxed

monthly.People who supply employees as consultants are called labour

brokers.

Remember the Receiver has access to your bank account to see how much

interest you have earned so you have to furnish your banking details.

When you open a business you have to register for VAT and PAYE with the

Receiver, RSC levies with the Metropolitan Council and Unemployment

Insurance with the Department of Labour if you want to stay out of trouble.

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