What is the income tax return deadline 2021?

The income tax return (AKA Form 11) deadline for 2020’s income is the 31st of October 2021. If you file and pay your taxes online, the deadline is usually mid-November. 

On or before these dates, you must:

  1. Pay your preliminary tax for 2021
  2. File your 2020 self-assessment income tax return (i.e. Form 11)
  3. Pay your income tax balance for 2020.

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Who needs to file income tax returns?

Income Tax Returns are completed by self-employed people and people who only have or their main source of income is 1) rental income, 2) investment income, 3) foreign income, 4) maintenance payments, 5) fees that are exempt from PAYE and/or you have profited from share options or share incentives.

In this guide, you’ll learn what you need to do ahead of the income tax return deadline 2020 and what to do if you need help.

We know that tax deadline season can be the source of stress for some business owners, so please feel free to talk to our Client Services Team to discuss outsourcing your accounting responsibilities. We’re always happy to assist businesses with their tax return obligations.

1) Make sure you’re registered for ROS

ROS is Revenue’s Online Service and used to view and manage your business taxes with the Irish Revenue Commissioners. You should make sure you’re registered for ROS so you can avail of their deadline extension, which can be very beneficial for busy business owners.

(As a reminder, if you file a paper Form 11, the deadline is the 31st of October. If you pay and file on ROS, the deadline is usually mid-November.)

When you file via ROS, the tax you must pay will be calculated automatically based on the information you provide (i.e. self-assessment). This is more convenient than submitting on a paper Form 11 because you don’t have to wait for Revenue’s response.

If you rather not take care of the tax return process, you can outsource to an accountant. However, if you don’t have many receipts or transactions, you could consider making the return yourself. Talk to our Client Services Team to learn more about our accounting services. We’re happy to assist!

2) Gather your records

As a self-employed person, you should already have your business finances separate from your personal finances. If you need help in that department, check out our guide to Moving Your Accounts Online With Xero.

In order to file your income tax return, you need to gather the following documents:

  1. Business receipts – to back up your business expenses
  2. Sales invoices
  3. Bank statements

This process is called bookkeeping and it’s important that it’s done correctly so you pay the correct amount of tax at the end of the year. By keeping proper books and records, you can be confident that you’re minimising your tax bill as much as you can.

If you’re not sure how to prepare an accurate tax return, get started by talking to our Client Services Team. We’re happy to discuss our services for Sole Traders in Ireland.

3) Check your bank balance

If you’re a new business owner, you may not have heard of Preliminary Tax (PT) (it’s an advanced payment for next year’s tax). If you weren’t aware of Preliminary Tax, you may not have enough money to pay your tax liability due plus PT liability.

Using 2020 as an example, PT is calculated based on 3 options:

1) 90% of tax liability for 2021

2) 100% of the tax due for 2020

3) 105% of the tax due for 2019

Since income tax returns are due for the previous year (i.e. 2021 income tax return is for income earned in 2020), you may not have saved any cash for your tax bill.

If you know you’re going to have difficulty paying your tax liability upfront, you should contact Revenue immediately. You may be able to apply for a Phased Payment Arrangement.

If you outsource your accounting obligations, you should reach out to your accountant and let them know your situation. They can act on your behalf with Revenue and complete the necessary declaration to implement a payment arrangement.

Should you invest in accounting software?

If you have lots of receipts and bills to go through at the end of the year, you could subscribe to online accounting software to save you time on bookkeeping. It also helps you manage your cash flow easier, so it gives you more control over your finances.

Will you take on staff?

If your business is growing, you may want to hire your first employee to take care of some of the duties. When you take on staff, you need to register as an employer with Revenue. You also need to operate a payroll system and ensure you’re filing the correct PAYE returns.

Accountant Online can help you with this. We have a dedicated IPASS Certified, Payroll Team who are always happy to assist you with your payroll needs.

What to do next?

Preparing for your tax return deadline 2021 can be a source of stress for some businesses but if managed correctly, it can go by in a flash. Until next year.

In order to prepare; we recommend you follow these 3 steps:

  1. Gather together all of your records for your business, sales and purchase invoices, bank statements, cheque books, cash records etc well in advance of the deadline. Ideally, use online accounting software to record your documents.
  2. Bring them to your accountant as soon as you can to allow him/her maximum time to prepare your accounts and discuss your tax liability with you. When you set up on accounting software, you can share your account with your accountant so they have easy access.
  3. If you think that your liability will be substantial, talk to your accountant about ways to minimise your bill or set up a phased payment arrangement with Revenue.

At Accountant Online, we can help you prepare and file your income tax return. Get started by talking to our Client Services Team about your business and we’re happy to discuss our services with you.

Call us on +353(0)1 905 9364 or email us on hello@accountantonline.ie.

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Our client services team are always happy to talk to you about what's best for your needs

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