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The 2021 self-assessment deadline is the 31^st of October 2022; however, if you are signed up to the Revenue Online Service (ROS) you get a few extra weeks with an extended deadline of the 16^th of November this year.

There are several ways in which you can lower your tax bill, firstly by taking full advantage of the self-assessment expenses that you can claim. Generally, expenses that relate solely to the operation of your business can be claimed; for example, employee wages, advertising, phone, broadband, electricity, office supplies and stationery, cost of running a car or machinery, rent, the purchase of goods for resale, interest paid on loans and accountancy fees.

If an expense arises as a result of both private and business use, you might be able to claim a deduction for the portion of the expense that is related to the running of your business activities.

Another very effective way of reducing your tax bill further is investing in a pension. There are limits to the amount of pension contributions you can claim tax relief on in any one year. The limits are a percentage of your income, depending on your age to a maximum income of €115,000. For self-employed people, income is earnings less allowable expenses i.e., net earnings. Tax returns are based on the previous year’s income; therefore, they are also based on your age in the previous tax year:

• Under 30 years can contribute up to 15% of their earnings
• 30-39 years can contribute up to 20%
• 40-49 years can contribute up to 25%
• 50-54 years can contribute up to 30%
• 55-59 years can contribute up to 35%
• Over 60 years can contribute up to 40%

Once you submit your return for 2021 you must pay the balance of tax due for 2021 as well as a preliminary tax bill for 2022. Preliminary tax is your estimate of the tax bill for the current year based on your projected profits. Revenue recommends a minimum payment of 90% of the tax due for 2022 or 100% of the tax due in 2021 or 105% of 2020 tax if you pay by direct debit. It is important that you estimate preliminary tax as accurately as possible as interest can be charged if you underpay.

Filing your tax return can seem like an epic task however keeping good records of your expenses and dedicating time to the self-assessment process can save you hundreds if not thousands of Euros in tax. This is money you can reinvest in your business so it is time well spent.

Lisa Doherty, CFP^® BBS QFA RPA SIA is a CERTIFIED FINANCIAL PLANNER, Qualified Financial Advisor, Retirement Planning Advisor & Specialist Investment Advisor. You can contact her through John F. Loughrey Financial Services by telephone on 074-9124002 or by email on lisad@jfl.ie