Late Fees and your Tax Return

  Q: I won’t be able to file my tax return before the extended deadline of 12 November 2015, as I will be out of the country. Will late fees still apply to me, considering that I am a director and 100% owner of a company and that my only source of income is PAYE income from the company.    

6th November 2015

 

A: If you are what is referred to as a proprietary director i.e., you own more than 15% of the company, you will be obliged to file your tax return by 31 October or the extended filing date of 12 November 2015. If your tax return is not filed on time a surcharge of up to 10% of the tax liability will be due (if more than two months late).  If your payroll has been calculated correctly during the year, this would usually mean you do not have liability and therefore no late surcharge.

However the position is slightly different for proprietary directors in that the surcharge is calculated without any deduction for PAYE tax already paid. This means if for example €7,000 PAYE was stopped on your wages during the year, this would be the amount on which the surcharge is applied, i.e. in this case it is €7,000 * 10% = €700.

It is therefore very important that Proprietary directors ensure they meet the tax filing deadlines, as late return can result in significant liabilities.

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.

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