Missed the Tax Return Deadline

All is not lost if you have missed the October 31st deadline!

If you are yet to file your Self Assessment tax return help is still available! But don’t delay as Revenue’s penalty regime will mean that the penalties increase the longer you postpone filing your return.

If you have missed the paper deadline of October 31st you can avail of an extended deadline of the 17th of November, but only if you file online. So if you are one of the thousands of taxpayers expected to receive an automatic late filing surcharges you are by no means alone.

Late filing surcharges

If you submit your paper return at any point beyond the October 31st 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.

But there are some instances when you can get a late filing surcharge cancelled and there are some cases where penalties will be revoked.

The most likely reason is because you have a very good excuse - known as a Reasonable Excuse- this is at the discretion of the local tax inspector. Revenue give specific examples of a reasonable excuse such as loss of your tax records due to fire/ floor/ theft etc, submission problems either with the postal system or Revenue’s online service, serious illness, bereavement etc.

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.

Late Payment Penalties

It’s worth clarifying the difference between late payment surcharges and interest. Late payment penalties or surcharges are imposed to penalise the taxpayer for paying late. Interest is charged to reflect the fact that Revenue effectively gave interest-free credit whilst the tax was outstanding. So they are quite different and not in place of one another. The current rate of interest charged is .0219% of your liability per day.

One thing worth noting is that if you have agreed an installment arrangement with Revenue because you cannot pay your tax bill in one go, late payment surcharge should not be imposed- provided that you set up the arrangement before the late payment penalties started. However, interest is still chargeable. If you set up the arrangement before the subsequent late payment penalties kick-in, you should avoid these later penalties being imposed.

Conclusion

If you have yet to file your return you can still avail of a further 2 weeks by working with an accountant and filing online. If you have been charged penalties and there are exceptional circumstances that lead you to file or pay late, you may have grounds for appeal. If you would like some assistance in handling the appeal, please feel free to get in touch with you us.

Date published 1 Oct 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. 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 article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.