Identify And Quantify The Income Subject To Personal Tax Legislation: Taxation Report, UOL, Ireland

Learning outcomes 

1. Identify and quantify the income subject to personal tax legislation.

2. Apply the appropriate reliefs, allowances, and credits to calculate personal tax liabilities and detail the timing of payments required.

3. Interpret and apply current Irish tax legislation concerning income tax and VAT.

Taxation 1 Assignment

A friend of yours, John currently works for a computer software company. He is considering leaving his job to start his own business (as a sole trader) manufacturing specialist silicon computer chips.
John has never run his own business before and knowing that you are studying tax he has turned to you for advice concerning his tax obligations.

He expects his sales turnover to be approximately E150,000 in the first twelve months of trading. He is planning to purchase a small factory, machinery, and a van for use in the business. He also has plans to employ a lot of staff.

He plans to start a pension both for him and will commence an employer pension for his employees and is planning to contribute for his employees.

He plans to pay his employees a salary, a bonus for good performance, and will, at the option of his employees, provide a company car for their use (for both business and personal use). He will also pay their expenses for purchases made by them in the course of their employment (which are vouched as work expenses) and will provide a sum of E50 each month for their fuel expenses for traveling to and from work.

John will also pay into a Permanent Health insurance policy.

He has also asked you for advice about any tax exemptions or reliefs that he may be entitled to and that will minimize his tax liabilities.