Differences and Similarities between Household and Business Taxation

Differences between Household and Business Taxation

• Deductions: Businesses have more opportunities to reduce their tax liability, such as through business expenses.
• VAT: Households cannot reclaim VAT on goods purchased, whereas businesses can.
• Range: Businesses are subject to a greater variety of taxes compared to households. For Example, only Businesses must pay commercial rates.
• Collection: Businesses collect VAT on behalf of the Revenue Commissioners. Employers collect PAYE (Pay As You Earn) for individuals, whereas self-employed individuals must pay their tax directly to Revenue themselves.

Similarities between Household and Business Taxation

• Registration: Both households and businesses must register for tax purposes with the Revenue.
• Compliance: Both are responsible for accurately calculating and paying the correct amount of tax owed.
• Avoidance: Both households and businesses are allowed to legally reduce their tax liability through available deductions and reliefs.
• Records: Both are required to maintain records of their tax liabilities and the taxes they have paid.