If you register your business and personal tax account with our agency with the Revenue Commissioners, we are able to track your tax affairs and warn you about impending pitfalls and charges.
We will assist you deal with all aspects of the tax system and, with your co-operation smooth out the problem areas that can give rise to difficulties for you.
While we take the pain out of handling tax deadline, you should be aware of the following:
The deadlines arise because Ireland operates a self-assessment system for Income Tax and Capital Gains Tax, which applies to anyone who is self employed, a director of a limited company, or has income not taxed through the PAYE system.
It also applies to anyone with income not taxed via the PAYE system and capital gains subject to capital gains tax.
A payment on account known as preliminary tax must be made on or before 31 October each year. For 2005, the payment must be made by 31st October 2005 or by 17th November 2005 for filing via ROS.
The amount of preliminary income tax payable each year is the taxpayer's estimated income tax bill after giving a credit for tax deducted at source such as PAYE, or withholding tax on dividend income subject to the requirement that one must pay not less than 90% of the expected tax liability for the current year or 100% of the actual liability for the previous year.
Note, for preliminary tax purposes, income tax includes payments for self employed PRSI and the health levy.
All taxpayers, with some exceptions outlined below, must:
1) Pay preliminary tax on or before 31 October of each year. Preliminary income tax payments for the tax year ending 31 December 2005 should be paid on or before 31 October 2005 (or 17th November 2005 using the ROS Direct Debit system). Preliminary Capital Gains Tax payments for disposals in the initial period of the tax year 2005 ending on 30th September 2005 should also be paid on or before 31 October 2005 (or 17th November 2005 using the ROS Direct Debit system).
2) There is a provision for the payment of preliminary tax in installments by means of a direct debit. Taxpayers wishing to avail of this may base the amount of preliminary tax to be paid in this way on 105% of the tax payable for the pre-preceding year.
3) Make a tax return on or before 31 October each year. A tax return, showing details of all income and gains for the tax year ended 31st December 2005 must be submitted on or before 31 October 2005 or 17th November 2005 if filing on line using ROS.
4) If the preliminary income tax paid for 2004 is insufficient, pay the balance of income tax due for 2005 on or before 31 October 2005 (or 17th November 2005 using the ROS Direct Debit system).
5) The exceptions are:
a) Anyone, other than directors and their spouses, who pay all their income tax under the PAYE system and who does not have a capital gains tax liability.
b) Anyone who has been advised by their Inspector of Taxes that they are not liable to pay preliminary tax and who does not have a capital gains tax liability.
SELF ASSESSMENT - PENALTIES
You will be charged interest if preliminary taxes are not paid on time. You will also be charged interest if your preliminary income tax payment is less than 90% of the final income tax liability for the year, or 100% of the previous year's agreed income tax liability (excluding BES relief and relief for investment in films), whichever is lower. As mentioned above, you also have the option to pay 105% of the pre- preceding year (excluding BES and film investment relief).
Interest will be charged on preliminary Capital Gains Tax payments which are less than 100% of the final Capital Gains Tax liability for the year.
If you fail to make a tax return before 31 October (or 17th November via ROS) you will suffer a surcharge on your tax liability. Directors and their spouses who fail to make a tax return on time will incur the surcharge on their tax liability ignoring the tax paid under PAYE.
The surcharge payable on the submission of late returns is 5% of the tax liability (subject to a maximum of €12,700) where the return is filed within two months of the deadline.
If the return is filed more than two months after its proper filing date a 10% surcharge will apply (subject to a maximum of €63,500).
A sample of returns will be subjected to a detailed Revenue audit.
