Once you become a partner you become self employed. You will have to file an annual return with the Revenue Commissioners and discharge your own tax liability. These obligations are set out under Section 1095 Taxes Consolidation Act 1997 and Section 958 Taxes Consolidation Act 1997.

 

• You should retain sufficient funds from your income to discharge your tax liability at year end.

• Your firm will require you to keep your tax affairs up to date so that it may obtain a tax clearance certificate, this is essentially in order to carry out State work.

• Your accountant will be required to communicate to your firm that your affairs are up to date and all taxes including the appropriate preliminary payment for the current year are paid to the Collector general by the due date.

 

In preparation for the pay and file income tax deadline of 10th November 2018 (for online filing) you may wish to avail of pensions tax relief in respect of your 2017 earnings. Revenue will not allow tax relief to be backdated against 2017 earnings if you have not elected to claim the tax relief for that tax year or if your tax return has not been filed on time.

 

Contributions are relieved at your marginal tax rate generating an immediate saving of 40%, ie an eligible pension contribution of €20,000 would save you €8,000 in taxation.

 

NB Self employed individuals cannot carry forward relief. You must either contribute in a given period or lose the available relief.

 

The table below illustrates the maximum allowable contribution. You can of course contribute a lesser amount however the below represents an optimal approach. Maximum allowable contributions are age banded, ranging from 15% of allowable income for someone in their 20's to 40% for someone of 60+. The maximum allowable income for all age bands is €115,000.