TAX RETURNS - The Tax Fairy

When must I make my Tax Return?

When must I make my Tax Return? Under the Self-Assessment system, you have a legal duty to make a tax return every year. Tax returns will be issued to all persons on Revenue’s records who are considered likely to have a tax liability. However, it is your responsibility to see to it that you get, complete and submit your tax return on time.
Your tax return must be sent to the Collector General’s Division by 31 October after the end of the tax year i.e. your tax return for the tax year 2015 must be sent in by 31 October 2016. However, you should send in your tax return as soon as possible after the end of the tax year i.e. you should send in your tax return for 2016 as soon as possible after 1 January 2016, etc.
The earlier you send in your tax return, the sooner you will know your final liability for the tax year - this can be important when it comes to paying the balance due and calculating your Preliminary Tax for the following year. The following example illustrates the Preliminary Tax Payment dates and the Return Filing dates: As an ongoing Self-Assessment person you must: pay Preliminary Tax annually on or before 31 October, file your tax return after the 31 December, but not later than the 31 October following the end of the tax year. The 31 October is known as the “specified return date”, pay any balance of tax due for the preceding year on or before 31 October.

Persons coming into Self-Assessment for the first time Because of the option to pay Preliminary Tax of 100% of the previous year’s liability (i.e. liability net of PAYE tax) a payment of Preliminary Tax does not generally arise for the first year. However, you are advised to make a payment of 90% of the estimated liability. If, for example, your tax affairs for 2015 were dealt with under PAYE and you commence as a self-employed person in 2016 a payment of Preliminary Tax on 31 October 2016 is optional. An individual, who enters the self-assessment system because they have commenced in trading, have until the return filing date for the second year to submit tax returns for both the first and second year trading. However, as mentioned previously, early filing of returns is advisable, as it allows an individual to know in advance of payment deadlines what tax is due.

1What income do I include on my Tax Return?

Your tax assessment is normally based on your actual income arising from the 1 January to the following 31 December. However, if your income consists of profits from a business, trade, profession or vocation you may decide to prepare your accounts for a different accounting period. Assessments in respect of any other income i.e. investment income, rental income, foreign pension or foreign salary are all based on the actual income arising in the tax year (i.e. from 1 January to the following 31 December).

2What type of accounts will I have to submit with my tax return?

You are no longer required to submit your self-employed business accounts with your return of income. You must still, however, prepare accounts and then extract the relevant information from your accounts for entry in the Extracts From Accounts pages of the Return of Income, Form 11 or Form 11E, as applicable. These pages are essentially an extract from your accounts and NOT a tax adjustment computation. You do not have to complete the Extracts from Accounts if the source of income results from a partnership or if you have already submitted accounts relating to the return.

3What happens if I do not agree with my notice of assessment?

If the assessment is in accordance with your Return and you have made a correct Return then you have no grounds for not agreeing with it. If the assessment is not in accordance with your Return and you disagree with it, you may appeal against it by writing to your Inspector within 30 days from the date on the notice of assessment. When making your appeal you must: identify the specific matter with which you do not agree, pay the amount of tax not in dispute within one month of the date on the notice of assessment. If you fulfil these conditions your appeal will be accepted and your Inspector will discuss your appeal with you and, hopefully, resolve it. If you and your Inspector fail to resolve the matter, you have the right to have your appeal heard by the Appeal Commissioners and, if necessary, you can take your appeal further through the courts.

4How long must I keep Records?

You must keep your records for six years unless Revenue advises you otherwise. What happens if I fail to keep proper Records? Failure to keep proper records or failure to keep them for the necessary six years, where you are chargeable to tax, is a Revenue offence. If you are convicted of a Revenue offence you face a heavy fine and/or imprisonment. Do I need to employ an Accountant? In order to complete your tax returns and claim the various tax credits and reliefs due to you it is not necessary to employ an accountant or tax adviser. However, for specific advice on book-keeping and financial matters generally it would be in your own interest to engage an accountant or tax adviser. Revenue will normally correspond with your accountant, if you have one, and not with you.