Year-End Accounts and Company Tax Returns

All companies in Ireland have a statutory duty to file year-end accounts and an annual corporate or company tax return each year with the Companies Registration Office (CRO). Corporation tax (CT) is a tax on limited company profits, and your company must file a CT return every year even if it hasn’t made a profit.

Preparing year-end accounts can be a challenge when your focus is more on running and growing your business than preparing your statutory documents. For this reason, many businesses will hire an accountant to prepare their year-end accounts (unless they have in-house support or good accounting knowledge), but more and more businesses now are looking for a service that provides more comprehensive business, compliance, and advisory/management support.

If Outbooks does your year-end accounts then we will have everything we need to complete, accurately and on time, your CT tax return as well.

But besides your obligation to submit an CT annual return, for which year-end accounts must be done, the year-end accounts are a highly valuable company asset: they benefit business owners by providing essential information about their finances, the strengths and weakness of certain areas of the business, and quite often pinpoint where savings could be made or where to target investment. Annual accounts also come in very handy when, for example, making a mortgage application or raising finance.

The implications of failing to comply with the statutory requirement to file an annual CT return and year-end accounts with the CRO are serious, since failure to do so can result in substantial fines that accumulate daily, which can run into thousands of euro, loss of SME audit exemption for two years and even involuntary dissolution of the company and legal action against its directors by the Office of the Director of Corporate Enforcement (ODCE).

Here are some of the benefits of having your year-end accounts computed by an expert accountant:

  • Accurate, up-to-date information about your business at your fingertips will contribute to managing your stocks and cash flow more efficiently.
  • Identifying ways to strengthen your record-keeping procedures will help your business to run more effectively.
  • Guaranteed 100% compliance with Irish tax law will protect you and your business.
  • Assurance that you are claiming all expenses correctly will benefit your business.
  • Assurance that you are claiming every relief and exemption you are entitled to will help keep your tax bill down.
  • For companies that are subject to additional surcharges (e.g. professional services surcharge or undistributed investment income) you can rest assured it’ll be calculated in your tax return.

Capabilities

Since every limited company business in the Republic of Ireland must prepare a set of year-end accounts to accompany their annual CT return, many businesses these days outsource this highly stressful and time-consuming exercise to professional accounting firms such as Outbooks.

Outbooks will prepare your year-end accounts accurately and to the letter, check and collate all the documentation to attach with your company CT tax return, and make sure that it’s sent to Revenue on time. Our professional, seamless service, offered at very competitive prices, is dedicated to saving our business clients tax while also ensuring that they are 100% compliant.

It is highly likely that hiring a professional to compute your year-end accounts will save your business money, and that having Outbooks complete and file your company tax returns will pay off: a professional accountant checking the details of your books and accounts data is bound to identify areas where your business could become more efficient, where you could make tax savings, and even where your business could be sailing close to the wind in a situation of non-compliance.

Plus, remember that all accountancy services are a fully tax deductible and an allowable expense of running your business.

Outbooks provides a stress-free year-end accounts and company CT tax return service to ensure compliance and on-time filing and, by no means least, that your business fully avails itself of all legitimate exemptions and reliefs.

Outbooks leading year-end accounts and CT returns service includes accounts preparation, filing, and a review service. These services suit all types of businesses and include:

  • Year-end accounts
  • Abbreviated accounts
  • Corporation tax returns
  • Partnership accounts
  • Dormant accounts
  • School Accounts (FSSU)

We also provide services for sole traders and landlords and anyone else needing to file a self-assessment tax return with Revenue or apply for benefits or allowances in unison with paying income tax via PAYE.

Outbooks is here to assist businesses with all their statutory requirements. Our services include company secretarial, payroll, VAT returns, and just about every other tax and compliance consideration that is likely to have an impact on your company’s profitability and success.

Outsourcing corporate governance and statutory requirements to Outbooks will allow you to concentrate more on managing your business. Your company will be confident that it’s operating 100% compliantly, and, while there is no guarantee that the cost of our fees will add to less than the money we save you in taxes (and possibly fines), there is every possibility that our accountants will help you make some savings on expenditure. It is certain that Outbooks will make sure that your company is claiming every relief and exemption it’s eligible for.

For more information about any of our services, click the links to read more about them or call us today.

The compliance landscape in Ireland

There is more information about registering a limited company in Ireland on the CRO website and you can also visit the Terms and Conditions on our website for some more relevant information about the procedures and legal compliance and legal landscape in Ireland.

Outbooks can guide you through all the requirements for setting up and maintaining a Limited Company in Ireland – from choosing a name to registering your company to taking on the role of company secretary, and from there filing your first six-month tax return and from there on in working on the company’s year-end accounts, company annual tax return, and corporation tax return.

First annual return after incorporation

The first annual return of any newly incorporated Irish company is due six months after incorporation, this will normally become your annual return date (ARD). No accounts are required to accompany this first annual return on Form B1. The B1 annual return contains details of the director(s), company secretary and shareholder(s).

After this initial six-month return, your annual return must be filed on Form B1 accurately and on time every 12 months thereafter by your ARD. From the point of your second and all subsequent annual returns, your company will be required to file its financial statements alongside Form B1 in accordance with Irish Company Law. Your annual return must be submitted online no later than 56 days after the company’s ARD. You can change your Annual Return date (ARD) from the second annual return onwards, but not more than once every 5 years.

Outbooks can prepare your company’s first B1 annual return and submit it on your behalf to the CRO.

Annual returns and company accounts

Every company in Ireland must file its annual CT return with the CRO every calendar year, and the accounts must be made up to a date no more than nine months before the annual return date (ARD).

Each company has an Annual Return Date allocated to it (six months post-incorporation), which can be checked using the CRO’s Company Search facility. A company can bring forward their Annual Return Date or, depending on the circumstances, extend the ARD to a later date.

Outbooks can prepare your company’s annual financial statements in compliance with the Companies Act 2014 and Financial Reporting Standards.

Information that must be filed with an Annual Return

The annual return must detail all statutory information about the company and include:

  • Company Name
  • ROA
  • Details of the directors and company secretary
  • Authorized and issued share capital
  • List of past and present members
  • Information relating to the financial statements

The rules for most companies annual accounts

The documents listed above must be annexed or attached with the annual return and be filed online to the CRO.

On filing Form B1 and its annexes, there must also be a certificate, signed by both a director and the secretary, certifying that the financial statements and reports are true copies of those laid before them or to be laid before the company’s AGM (or as otherwise stated and signed in the articles of association):

  • A profit and loss account (or an income and expenditure account if the company is not trading for profit)
  • A balance sheet
  • A directors’ report
  • A statutory auditor's report (if applicable)

For larger companies, the annual financial statements and directors’ report must be signed on behalf of the directors by two directors. Where the company is a private limited company, a private company limited by shares, registered under the Companies Act 2014, and has only one director, the documents should be signed by the sole director.

In Addition:

If the company does not have an EEA-resident director a Section 137 Non-Resident Directors Bond must be put in place.

Both the seven statutory registers and the register of beneficial owners must be updated as appropriate.

Tax requirements and tax legislation must also be adhered to.

Penalties and fines for late filing or inaccurate reporting

The result of failing in any of the statutory requirements related to year-end accounts and filing your annual CT return on time all adds up to the possibility of substantial penalties, and includes possible strike-off, as well as, if applicable, loss of your SME audit exemption for two years.

How can Outbooks help?

Outbooks’ year-end accounts and company returns package is designed to look after your company’s statutory obligations and protect you for breaching any compliance legislation. Your financial statements (inclusive of your year-end accounts) form part of the B1 annual return. We compute it, we check it, we send it to you for checking before filing it, and you can be 100% certain that we will be managing it on your behalf from start to finish.

Your year-end accounts, corporate tax return, and paying corporation tax

Corporation Tax Return

A company must be registered with the Companies Registration Office (CRO) to have received a registration number to sign up with Revenue via the Revenue Online Service (ROS).

Dates

The company’s financial year-end dictates when your company’s corporation tax return is due. The CT return is due and payable by the 21st day of the ninth month after that financial year-end and so, for example, if the company year-end is 31 December 2019 the corporation tax return is due by 21st September 2020.

Note that Form 46G, which includes details of certain supplier payments, is due at the same time as the CT return.

Payment Due

In addition, a preliminary tax payment and/or declaration must be made for corporation tax purposes. For small companies with tax liability of less €200,000 this is due by the 11th month of the current financial year, that is, if your company’s financial year-end is 30 June 2021, preliminary tax is due by 21 May 2021. In other words, you must make your payment before you file your CT tax return.

Outbooks Corporation Tax Services
  • Annual accounts
  • Corporation tax returns collation and filing
  • Tax registration: corporation tax, VAT, Economic Operations Registration and Identification (EORI)
  • Preparation of company and group tax computations
  • Advice on R&D tax credits and Knowledge Development Box reduced-rate corporation tax
  • Advice on close company impact
  • Liaising with the Revenue Commissioners and correspondence
  • VAT and PAYE Compliance

Overview of corporation tax: compliance and rates

Corporation tax (CT) must be paid by Irish resident companies and non-resident companies on taxable profits if:

  • A resident company trades in Ireland
  • A non-resident company trades in Ireland through a branch or agency; or
  • From 1 January 2022, a non-resident company is in receipt of profits or gains in respect of rental property in Ireland.

Corporation Tax

In Ireland, there are three rates of corporation tax:

  • 12.5% for trading or active income
  • Income from an excepted trade (defined in part 2 of the Taxes Consolidation Act) 25% for income
  • 25% for non-trading or passive income, for example rental properties and investment income.
  • 6.25% for “knowledge development box” (KDB), Irish Companies investing in research and development will be able to avail this new rate.

Corporation tax is charged on the profits in a company’s accounting period, which cannot be longer than 12 months.

Payment and Filing

All filing and payment of any corporation tax due must be done online using Revenue Online Service (ROS). It is the company’s statutory obligation to:

  • Calculate and pay preliminary tax by the specified due date
  • Complete and file a CT1 Form and a 46G Form (Company) by the return filing date
  • Pay any balance of tax due by the return filing date.

New or start-up companies

New or start-up companies do not have to pay preliminary tax for their first accounting period if the corporation tax due is less than €200,000 (excluding surcharge but including income tax payable). These companies must instead pay their what they owe in corporation tax for the first accounting period when submitting their CT return.

Small companies

Small companies must pay their preliminary tax in one instalment if their corporation tax liability of less than €200,000 in their previous accounting period. This must be paid 31 days before the end of their accounting period, and before the 23rd day of that month.

Contact Outbooks

Outbooks provides a cost-efficient and stress-free year-end accounts and CT returns service to ensure your company is to-the-letter compliant and that your business fully avails of all legitimate exemptions and reliefs.

Outbooks leading year-end accounts service includes accounts preparation, filing, and review. These services suit all types of businesses and include:

  • Abbreviated accounts
  • Partnership accounts
  • Sole Trader accounts
  • School accounts
  • Rental accounts
  • Dormant accounts
  • Corporation tax returns

FAQs

What sorts of companies need audited accounts?

Only companies whose turnover or group turnover exceeds Euro 8.8 million are obliged to prepare and file audited accounts. Most registered charities (companies limited by guarantee) must usually file audited accounts. However, if the CRO has penalised your company for late filing or inaccurate reporting, you will lose your status as a small business and will be subject to carry out annual audits for the following two years.

What are the fines and penalties for late filing of a CT annual return and late payment of any corporation tax due?

The penalty for filing a company’s annual return after the deadline comes with a surcharge of:

  • 5% of the tax due up to a maximum of €12,695 if filed within two months of the filing date; or
  • 10% of the tax due up to a maximum of €63,485 if filed more than two months after the filing date.

Restrictions to claim certain reliefs apply for companies that file their CT return late. these restrictions correspond to the length of the delay, for:

  • excess capital allowance
  • loss relief
  • group relief

The late payment penalties are quite brutal, at a daily rate of 0.0219% on late payments or payments that are not made in full. The interest is calculated by multiplying together the:

  • amount of tax a company has underpaid
  • number of days the tax is late
  • interest rate.

Note that you cannot appeal an interest charge to the Tax Appeals Commission. Once interest has been charged you must pay the full amount outstanding, it cannot be reduced.

What is a non-EEA resident director Bond?

According to the Companies Act 2014, if an Irish Company does not have at least one company director who is resident in the European Economic Area (EEA), a bond must be taken out. This requirement relates to residency and not citizenship: a company director who holds an EEA passport but resides outside of the EEA will also require a bond. A Revenue Bond insures the company for a sum of €25,000, to cover the following:

  • Any fine imposed on the company in respect of offences under the Companies Act 2014, for example: failure to file annual returns on time.
  • A fine for failure to supply certain information to the Revenue Commissioners.
  • Any penalty which the company has been held liable to pay under S1071 or S1073 of the Taxes Consolidation Act 1997.
  • Any expenses incurred in recovering the fines and penalties mentioned above

The Non-Resident Bond covers a period of 2 years and must be put in place at incorporation of the company.

What is my ARD?

A company’s annual return date (ARD) relates to the latest date to which an annual return must be made up. The annual return must be filed with the CRO within 28 days of that date. Your ARD date is normally six months after the company was first incorporated.

When must my first annual return be submitted?

The first annual return date (ARD) is six months after the date of incorporation. While a company must submit an annual return by this date, no accounts need be attached to this first six-month return. Second and all subsequent ARDs will fall on the anniversary of the company's first ARD, unless the company elects to change its ARD. Accounts and must be attached with these returns.

How does the three-year relief from corporation tax for start-up companies work in Ireland?

A newly trading start-up company may qualify for corporation tax relief for the first three years if the total amount of corporation tax payable by the company for an accounting period within the three-year start up period does not exceed €40,000. Marginal relief on a tapering basis applies where the total amount of corporation tax for the accounting period is between €40 and €60,000. There are measures in place to ensure that the relief is focused on job-creation in that the amount of tax relief is based on the social security contributions the company makes in respect of its employees. This is subject to a limit of €5,000 per employee and an aggregate limit of €40,000 in any one period.

Unused relief arising in the first three years of trading, whether due to losses or insufficient profits, may be carried forward for use in subsequent years.

What is the Research & Development (R&D) tax credit and who qualifies for the R&D tax credit?

To encourage companies in Ireland to invest in research and development activities R&D credit are available. To get 25% tax credit companies should carries out R&D within the European Economic Area (EEA).

The company qualifies for the R&D tax credit if it meets the following conditions.

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