Have you missed the income tax deadline and your tax returns are now late?
Dealing with your personal tax affairs, and in particular the income tax filing and payment deadline, can prove stressful. Over the course of the Covid pandemic we are aware that some people fell behind on the filling of their income tax returns. What can you do now?
1.Gather your income tax records and engage an accountant to submit your returns : As the return is now late Revenue may enforce penalties, but these will increase the longer you leave it to file your tax return. The penalties you need to pay will depend on the amount of your tax liability. 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 up to a maximum penalty of €12,695 . If the return is more than 2 months late this surcharge is increased to 10% up to a maximum penalty of €63,485. You may also be subject to interest at a daily rate of 0.0219 per cent backdated to the 31st October rather than the extended deadline in November.
What happens if you do not have the money to pay the tax liability? In cases where taxpayers have difficulty meeting their tax liabilities and are engaging with Irish Revenue directly or through their tax adviser then we may be able to agree a payment arrangement to spread the tax liability over a period of time.
2. If you have a reasonable excuse for missing the deadline, apply for charges to be waived : Revenue may waive charges for a taxpayer who has a “reasonable” excuse for being late.
3. Plan Ahead : We have started preparing 2021 income tax returns for taxpayers. Preparing your tax return early in the year means you are prepared and budgeting to meet your income tax liability in October. Filing your tax return on time reduces stress and reduces the unnecessary costs attached to obtaining last minute loans to finance an income tax liability. It also provides you with an opportunity to reduce your income tax liability by making pension contributions before the deadline date.