Wendy Merrigan lists three tips on tax planning for June that will help Irish companies with their finance
If your company has a year end of 31 December, usually at this time of year, we review the previous year’s accounts for companies to see if there is Corporation Tax due in September. Many companies in Ireland made a profit for the financial year 2019 and there will be Corporation Tax due on those profits on 23 September 2020.
To minimise that, we can take into account salaries paid to directors to 30 June 2020 (once the PAYE on those amounts are paid before 23 July 2020). This gives us an opportunity to potentially reduce Corporation Tax, you pay PAYE and get the company funds to the Directors in a tax efficient manner (one tax, not two).
If you are trading and still have cashflow available, you can review 2019 numbers (even at a high level), to plan for this month’s salary.
You do NOT have to pay the net salary to yourself (as director), however you HAVE TO pay the PAYE and payroll taxes due to Revenue on or before 23 July 2020 re the June payroll.
If your accountant hasn’t been talking to you and you’re a company director that feels you can benefit of this option, be sure to reach out to them as soon as possible. There is limited time available to review your 2019 figures before payrolls get run this month, if you haven’t got them done or in progress, yet. A very high-level review could be done in the coming weeks. Allow time for your accountant to look at these numbers and advise accordingly. Don’t get caught out by not looking at your options.
Whether you have cashflow right now will determine what you decide regarding the above point. If your company doesn’t have enough cashflow to consider paying tax on a bonus this month, you can still review your 2019 numbers to know what Corporation Tax may be due in September. Whether you are setting up a payment plan with Revenue for this amount or must budget it into your cashflow, it’s good to estimate what will be due.
Improve this week (and next)
I recently came across an excellent article written by Craig Ballantyne; 10 Proven Strategies to work 10 fewer hours THIS week.
I sent this to several colleagues who all work for themselves also. Each of us took something different from the list but we’ve each committed to working on that one point to ensure we improve how we operate. If you apply even one of the techniques and take on board some of the ideas in the piece, it is guaranteed to help you get more efficient, focus on what really matters and put yourself and your own goals first (something many business owners struggle with). I already apply a few techniques noted so I know first-hand THEY WORK.
A few pointers I can improve on;
- Making some things ‘non-negotiable’ and having those in the diary
- Ensuring ‘Magic Time’ is focused and not interrupted
….and there’s plenty more
I’ve overlooked his negative comment about talking to your accountant. He clearly doesn’t have me as his ?
We should all have a good relationship with our financial advisors. We want them to care about us, understand our business and take time to communicate with us in a way that serves our needs.