Income Tax first year of business

There seems to be confusion that business's don't pay tax the first year that they are in business. Unfortunately you pay tax every year that you have taxable income, it's just the timing of it that can cause confusion. You put in your tax return for any given year by the following 31 October. Therefore you do put in a return for your first year however isn't sent in until the following October. At this stage you need to pay the first year's tax and preliminary tax for the second year. So you get hit with a double tax therefore I always advice clients to pay income tax on a systematic basis in the first year to avoid a situation where you cant afford to pay all the tax that may be due. Its actually further complicated by a concession by the Revenue Commissioners that you can wait two years to submit the first return. This can be advantageous if your business is in need of a lot of working capital to get to a point of sustainability but it is a risky concession to avail of if you haven't planned for the amount of income tax that will become due in the third year which could amount to 3 years of income tax.