What was the Income Tax return deadline for 2021?
The Income Tax return (AKA Form 11) deadline for 2020’s income was the 31st of October 2021. If you filed and paid your taxes online using ROS, the deadline was extended to Friday, the 19th of November 2021.
If you have missed this deadline, get in touch with our Client Services Team who will be happy to advise you on your next steps.
On or before these dates, you should have:
- Paid your preliminary tax
- Filed your self-assessment Income Tax return (i.e. Form 11)
- Paid your Income Tax balance
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. Check out our guide on how to register as self-employed for more information.
In this guide, you’ll learn what you should have done ahead of the 2021 Income Tax return deadline.
We know that tax deadline season can be a source of stress for some business owners, so please feel free to talk to our Client Services Team to discuss outsourcing your accounting responsibilities, or to discuss what you can do if you’ve missed a deadline. We’re here to help!
Every year, before your tax return deadline, you should:
1) Make sure you’re registered for ROS
ROS is Revenue’s Online Service and is used to view and manage your business taxes. Make sure that you are registered for ROS so you can avail of the 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. In 2021, the deadline for filing on ROS was Friday, 19th 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 would 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.
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:
- Business receipts – to back up your transactions and claim tax-deductible expenses. Check our post on tax-deductible expenses in Ireland for more information.
- Sales invoices
- 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 (check out our guide on how to minimise tax liability as well).
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 be asking: What is Preliminary Tax? (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 2021 as an example, PT is calculated based on 3 options:
1) 90% of tax liability for 2022
2) 100% of the tax due for 2021
3) 105% of the tax due for 2020
Since Income Tax returns are due for the previous year (i.e. 2022 income tax return is for income earned in 2021), 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 talk to an 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.
Is it time to change from Sole Trader to a Limited Company?
If you’re earning more than you need as a salary, then you may be able to save on your tax liability by changing into a company. There are also more options for growth as a company and more ways to pay yourself (check out our How to Pay Yourself guide)
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. Check our post on the best accounting software for more information.
Do you need an accountant?
Are your accounting obligations becoming too complicated and time-consuming? Do you want to delegate the responsibility to a professional online accounting firm so you have more time to focus on running your business?
Get started by talking to our Client Services Team about your needs and we’re happy to talk you through our accounting and compliance services for businesses in Ireland.
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 (check out our Payroll Services page).
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 outsourcing needs.
What to do next?
Preparing for your tax return deadline 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:
- Gather together all of your records for your business, sales and purchase invoices, bank statements, checkbooks, cash records, etc well in advance of the deadline. Ideally, use online accounting software to record your documents (check out our What Is Accounting Software? post and our Bookkeeping Tips post as well).
- 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 (read our Xero setup checklist for more information).
- 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. We can also advise you on what to do if you’ve missed your 2021 tax deadlines. Get started by talking to our Client Services Team about your business and we’re happy to discuss our services with you.
Kiera leads the Bookkeeping, VAT, and Payroll Teams at Accountant Online. Kiera has worked in the financial services industry for over 18 years. She is passionate about helping businesses to get their finances in order so they can get back to what’s important: running your business. Kiera holds a part-qualified accountant qualification from ACCA.