The October 31st deadline for filing 2011 tax returns is fast approaching. Have you taken the necessary steps to ensure you don’t miss the deadline and incur possible interest and penalties?
This is THE most important tax deadline if you are self-employed or in receipt of rental or other non-PAYE income, but it can also affect you even if all your income is from PAYE employment. October 31st is the deadline for:
• Filing a Form 11 Income Tax return for 2011
The self-employed, those in receipt of rental income or of any income other than from PAYE employment, and pensioners in receipt of pensions in addition to the State pension must all file an annual tax return called a self-assessment tax return (known as a Form11).
• Paying any Income Tax liability for 2011 and any Preliminary Tax due for 2012
Preliminary tax is an advance payment of your income tax for 2012. It is based on your own estimate of your total 2012 liability for income tax, PRSI and Universal Social Charge (USC). To avoid interest charges you must pay by October 31st preliminary tax which is equal to or greater than the lower of 90% of your final tax liability for 2012, or 100% of your tax liability for 2011.
• Filing your 2011 Capital Gains Tax (CGT) Return
If you made a Capital Gain in 2011 then you must file a capital gains tax return by 31st October. You are potentially subject to capital gains tax if you disposed or part disposed of an asset e.g. land, buildings, shares etc.
If you are filing a Form 11 then details of your capital gains must be included therein. If you don’t need to file a Form 11 return, then you can use the simpler Form CG1 to return your 2011 Capital Gains. However, if you do file a CG1 it is likely that Revenue will also request that you file a Form 11 for that year.
• File a Capital Acquisitions Tax (CAT) Return
If you received a Gift or Inheritance in the year ended 31st August 2012 you must file a form IT38 and pay any liability due by 31st October.
• Additional Pension Contributions to be claimed against your 2011 Income Tax
Qualifying pension contributions made by the deadline date can be backdated for tax relief against 2011 tax liabilities.
Extended Deadline of 15th November 2012
The 31 October 2011 Pay & File deadline for 2011 Income Tax returns is extended to Thursday 15th November 2012, but only for returns filed online via the Revenue’s ROS system.
To avail of the extended deadline you must:
1. file your 2011 Form 11 Income Tax return by 15 November 2011 using the online ROS system; and,
2. also use the Revenue ROS system to pay yourself-assessment tax liability, i.e.
a. Balance of Income Tax payable for 2011; and
b. Preliminary Tax for 2012.
Unless these conditions are met the existing deadline of 31st October 2012 applies. To file online you must first register with ROS. Your accountant or tax agent can file online on your behalf.
Consequences of late filing and/or payment
Revenue imposes a surcharge of 5% on the final tax liability for late tax returns – if they are filed by the 31st December – if filed after that date the surcharge increases to 10%. It is very important to note that the surcharge is on the tax liability NOT the amount of tax outstanding.
Late filing also increases the risk of being selected for audit. The majority of cases selected for audit by Revenue are selected using a risk based system. Non-compliance increases your risk profile and therefore increases the likelihood of being selected.
Non-compliance will also result in the refusal of tax clearance certificates. Company directors who file late can also impact on the issuing of the company’s tax clearance cert, even where a company’s tax affairs are up to date.
For more information or to arrange an appointment contact McLaughlin McGonigle, St Helens, St Oran’s Road Buncrana, Co. Donegal. Tel +353 (0)74 9321420 / Fax +353 (0)74 9321421/or email: email@example.com
McLaughlin McGonigle t/a MLMG Financial Advisors is authorised to undertake investment business in Ireland by the Association of Chartered Certified Accountants