The deadline for filling an income tax return for 2016 is only around the corner and unless your only income is a salary from and employment on which you pay tax through PAYE and you do not own any other investments, assets etc. then you have an obligation to file a return.
Who Should File?
In particular if you answer yes to any of the questions below then you should read the points raised in this article and seek confirmation from your accountant or tax advisor on whether you should be filing an income tax return for 2016.
- Do you own your own business?
- Are you a director of a company and you hold more than 15% of the shares in that company?
- Did you rent out a property during 2016?
- Did you make any investments or receive a return on any investments such as dividends, proceeds from a sale etc.?
- Did you receive shares under an employee share scheme or do you hold stock options?
- Were fees paid to you outside of your salary?
- Do you have any foreign sources of income, foreign pensions or do you hold any foreign properties?
- Did you open a foreign bank account?
- Have you acquired a foreign life policy?
- Have you acquired a material interest in an offshore product or fund?
- Have you sold any assets during the year?
When Should You File/Pay?
The deadline for filing a return in respect of 2016, for making a balancing payment of any tax due in relation to 2016 and for making a preliminary tax payment in respect of the tax year 2017, is 31st October 2017. However Revenue have confirmed in their e-brief no. 38/17 issued on 25th April earlier this year that for taxpayers who pay and file their tax returns through Revenue’s Online Service (‘ROS’) this deadline is extended to Tuesday 14th of November 2017. If you file your own tax return and are experiencing any problems with ROS, you can contact ROS Helpdesk at 1890 201 106 (+353 1702 3021), email roshelp@revenue.ie or submit an enquiry through MyEnquiries selecting the following headings: “Other than the above” and in the next drop down menu “Revenue Online Service (ROS) Technical Support”.
How Should You Pay Your Taxes?
You can make payment of your income/preliminary tax by ROS Debit Instructions (RDIs), Laser Card, Debit Card, Credit Card or Online Banking. If you do not have an active ROS digital certificate and an Agent is submitting a return on your behalf, they can make a payment on your behalf if you provide them with RDI details. Alternatively you can now make an online payment for Income Tax through myAccount. You can register for myAccount on the Revenue website. If you need assistance with making payments on ROS, you can contact ROS Payment Support Unit at 1890 226 336 (+353 1702 3052), email rospayments@revenue.ie or through MyEnquiries: Submit an enquiry selecting the headings: “Other than the above” and then in the next drop-down menu “Revenue Online Service (ROS) Payments”.
Please note if you are in a refund position Revenue no longer issue cheques for refunds of Income Tax for mandatory e-filers and you will need to ensure that your bank account details are recorded on ROS and are up to date.
What Happens If You Pay/File Late?
If you do not pay your income tax on time then Revenue will impose interest and they may also impose penalties on the overdue tax. Interest is charged at 0.0219% per day (approx. 8% annually) for late payments. If your Income tax return is late, a surcharge will be added onto your tax due, as follows:
- If you missed the deadline of 31/10/2017 (or 14/11/2017 for ROS customers) and you file your tax return before 31st December 2017, there is an extra penalty of 5% of the tax due (up to a maximum of €12,695).
- If you file your tax return after 31st December 2017, there is an extra penalty of 10% of the tax due (up to a maximum of €63,485).
When Should You File/Pay?
As mentioned above 31st October/14th November 2017 is also the deadline for chargeable persons to make an advance payment of tax due for 2017. This is known as preliminary tax The amount of the preliminary tax payment must amount to at least one of the following:
- 90% of the tax payable for the tax year in question, or
- 100% of the tax payable for the previous tax year, or
- 105% of the tax payable for the pre-preceding tax year.
In order to avail of this option a direct debit arrangement must be put in place. If no preliminary tax payment is made or if it does not equal the minimum payment requirements (as outlined above) then Revenue may impose interest on the underpayment from the 31 October until the date the payment is made. This is an area that Revenue are focusing in on more therefore it is important to assess whether you are liable to make a preliminary tax payment and to make sure that it is paid on time.
Conclusion
If you do have an obligation to file an income tax return then you should take note of the following:
- The income tax deadline is 31 October 2017 for taxpayers who do not both pay and file their income tax returns on ROS.
- If you do file and pay your income tax on ROS then this is extended to 14 November 2017.
- You can make a payment of your income tax and preliminary tax by ROS Debit Instructions (RDIs), Laser Card, Debit Card, Credit Card or Online Banking.
- If you make a late payment of the balance of tax due for 2016 or of preliminary tax due for 2017 then Revenue will impose interest on the late payment at a rate of 0.0219% per day.
- If you file your income tax return late then they can impose a late filing surcharge of 5% where the return is filed within two months of the deadline and 10% where the return is more two months late.
- Remember your preliminary tax payment must equal at least,90% of your 2017 income tax liability, 100% of your liability for 2016 or 105% of your 2015 income tax liability (if you chose this last option you must set up a direct debit with Revenue).
As always if in doubt or if you need any assistance with your tax affairs please do not hesitate to contact us, we would be more than happy to help.
Please contact the author, Aoife Murray for more details.