Don’t make a bad situation worse – file now to avoid further financial pain
The income tax deadline has been and gone for another year but for a number of people the deadline passed without filing a return. There can be any number of reasons for missing the deadline, but the same advice applies across the board if you find yourself in this situation – get the outstanding return filed as soon as possible!
If, for some reason, you are one of those who failed to meet the deadline there are numerous implications that you need to be aware of:
- Interest at a rate of 0.0219% per day is applied for each day that the return remains outstanding.
- There is a 5% late filing surcharge, calculated based on your 2017 income tax liability, if you file within two months of the 31 October 2018 deadline. This then doubles to 10% if you do not file within 2 months of the deadline i.e. by 31 December 2018
- As is the case with all outstanding returns, not just income tax, failure to keep up to date with your tax obligations will result in your Tax Clearance Certificate being revoked. This can be especially problematic for those businesses who require this certificate to tender for work in the public sector, apply for grants from State bodies or who need an excise license to sell alcohol in restaurants or pubs.
- Any tax refunds due under other tax heads e.g. VAT will not be processed until the outstanding return is filed and taxes paid.
- Having tax returns outstanding with Revenue can increase the likelihood that you will be chosen to be audited which everyone wants to avoid!
There is some flexibility for appealing surcharges if you have a ‘reasonable excuse’ and this is at the discretion of the local tax inspector. Revenue provides some examples of a reasonable excuse such as loss of your tax records due to fire or theft, submission problems either with the postal system or Revenue’s online service, serious illness or bereavement.
If you think you might have grounds to make a reasonable excuse, be aware, that there are strict guidelines on what does not qualify, and these include work commitments, complexity of your affairs, lack of information, even notes that long periods convalescing will not necessarily be a reasonable excuse. And you will need evidence to support your claim too, such as prints of error messages, proof of postage, etc.
So, if you have missed the deadline don’t delay – act today to save yourself an additional financial and administrative burden on your business.
By Michael Scanlan
Last updated November 2018