What's the difference between late filing surcharges & late payment interest?

I missed the tax return deadline and have to pay surcharges and interest – do I need to pay both and what’s the difference?

13th November 2019

If you have miss the deadline of 17 November for filing your 2018 tax return you can expect to receive an automatic late filing surcharge and you will also be charged interest on the outstanding tax bill. The two charges are quite different and not in place of one another.

Late filing surcharges

If you submit your income tax return at any point beyond the filing deadline you will be issued with a surcharge of 5% of the tax liability for the year (before any payments).  If the return is more than 2 months late this surcharge is increased to 10%.

For example a proprietary Director files their income tax return 3 months late.  Their tax liability for the year was €15,000 which was paid through the PAYE system. A surcharge of €1,500 would be payable even though there is no tax liability outstanding.

Late payment interest

Late payment interest is charged to reflect the fact that Revenue effectively gave interest-free credit whilst the tax payment was outstanding. 

The current rate of interest charged is .0219% of your liability per day.

 

Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Why choose TaxAssist Accountants...

Location pin

Our accessible mobile apps remove all the hassle

Location pin

Meet face-to-face at one of our 20 locations across Ireland

Location pin

Receive a fixed fee quote for the work that needs to be done

Location pin

Local accountant is supported by a team of tax experts

Contact us today to book your FREE consultation at your local office:

1800 98 76 09

Book a free consultation

Contact us today to book your FREE consultation at your local office:

1800 98 76 09

Book a free consultation