Tax simplification measures for small business

A recent survey by the Irish Taxation Institute found that the majority of small businesses in Ireland find VAT and PAYE places an unnecessary administrative burden on them.  This is not surprising given the frequency of returns – Bi-monthly for VAT and monthly for PAYE.

There are some options available that could help reduce that burden:


  • Monthly direct debit with an annual return.  This is available to businesses with a monthly VAT liabilty of less than €50,ooo.  You set the direct debit at a level that will cover your liability for the year.  You make an annual return at the end of the year and make any balancing payment due.  It is important to remember that Revenue can apply interest where the balancing payment is greater than 20% of the final liability.
  • Cash basis of accounting.  This is where you return the VAT on sales based on when you get paid not when you issue the invoice.  This has obvious cash-flow benefits.  It is available to businesses with annual turnover of less than €1,000,000 or where 90% or more of the business’s turnover comprises of sales to persons or companies that are not VAT registered .
  • Bi-annual filing and payment.  This is only available to businesses with an annual VAT liability of less than €3,000.  It could be useful in a start-up situation.
  • 4 monthly filing and payment.  This is available for businesses with an annual VAT liability of between €3,000 and €14,000.


Similar measures are available for return and payment of PAYE and PRSI. 

The monthly direct debit facility is available for businesses with a monthly liability of less than €25,000.  Similar to the VAT scheme Revenue may charge interest on any balancing payment that is in excess of 10% of the final liability.

Quarterly returns and payments can be made by businesses with a PAYE/PRSI liability of €28,000 or less.

If you think any of these measures may help you feel free to contact us.  We will be happy to discuss them with you.

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