15 Nov 2012 is ROS ‘Pay & File’ Tax Return Deadline

Revenue have confirmed this morning that the existing 31 October 2011 Pay & File deadline for 2011 Income Tax returns is being extended to Thursday 15 November 2012 for returns filed online via the ROS system.

To avail of the extended deadline, an individual must, by 15 November

1. file their 2011 Form 11 Income Tax return by 15 November 2011 using the online ROS system.
2. also use the Revenue ROS system to make their ‘Pay & File’ self-assessment tax liability, ie

• Preliminary Tax for 2012;  and
• Balance of Income Tax payable for 2011

The existing deadline of 31 October 2012 applies, unless:

• the Form 11 tax return is filed on ROS; and
• the required Income Tax payment is made using ROS.

Capital Gains Tax

The Revenue announcement makes no mention of any extension to the Capital Gains Tax return filing deadline of 31 October next. Individuals subject to self-assessment Income Tax are required to file their Capital Gains tax details as part of their 2011 Form 11 Income Tax Return. However, separate payment deadlines apply for Capital Gains Tax liabilities.

Capital Acquisitions Tax

The deadline extension also applies to Capital Acquisitions Tax (CAT) payments and IT38 returns for gifts or inheritances with valuation dates in the year ended 31 August 2012. Again it is conditional on the CAT IT38 return filing and tax liability payment both being made through ROS.

Online filing is now compulsory for almost all IT38 returns so the extended deadline will be especially useful here, as it will provide for more time for beneficiaries to sell assets or liquidate investments in order to meet the CAT payment deadline.

Pension Payments

In previous years, the extended 15 November deadline has also applied for the purposes of RAC, AVC and PRSA pension payments.   Today’s Revenue eBrief does not mention this particular issue although I expect that the 15 November deadline will also apply this year where the individual pays & files via ROS by 15 November.

This would enable qualifying pension payments, made by 15 November 2012, to attract backdated tax relief against 2011 tax liabilities. However Revenue have not yet confirmed that this concession will continue this year.

If you are considering making a pension payment in November and claiming the tax relief against your 2011 liability, please make sure to check for further Revenue updates between now and October. In the meantime, in case of doubt, it is safer to work on the assumption that the previous 31 October deadline applies, and make any such pension payment by the end of  October.

Finance Bill 2012: Blaas, Bagels, Cricket & Tax Scams

Finance Minister Michael Noonan has today introduced the 2012 Finance Bill.  Its highlights include:  VAT cuts on bagels, blaas and other specialist bread products; tax relief for professional cricketers; new Revenue powers to combat serious tax scams, and a new self-assessment system for Stamp Duty.

The Bill gives effect to the changes set out in the Budget announced last December, and also contains a raft of technical housekeeping measures, in addition to the following key points:

INCOME TAX

Tax Relief on Third Level Fees

The tax relief on third level tuition fees is being curbed.  For full-time students, the first €2,250 in annual fees will not qualify for tax relief. For part-time students, the first €1,125 in fees is ineligible for relief.

Civil Partnerships

The Bill proposes two notable changes to the tax regime for civil partnerships. Legally binding maintenance agreements made on the breakup of a civil partnership will now be treated for tax purposes in the same way as those for married couples.

The second change will allow that following the breakdown of a civil partnership, where there is a  legally binding agreement, and the parties are still living under the same roof, they will enjoy  the same tax treatment as formerly married couples in similar circumstances.

Revenue Job Assist

Individuals who are signing for PRSI credits with the Department of Social Protection can now qualify for the Revenue Job Assist scheme. This scheme allows an individual to claim a partial tax deduction in each of the 3 tax years after they take up employment having been unemployed for at least 12 months.

Share-Based Remuneration

The Bill provides for the following changes to share-based remuneration: mainly affecting the I.T. sector.

• Where employees and directors have deferred the payment of income tax on share option gains due to a drop in the share price, half of any after-tax gain on the sale of the shares must now go to pay down the outstanding income tax liability until that liability has been cleared.

• Income levy and USC refunds may apply where shares are forfeited.

• An employer can now withhold or sell sufficient shares awarded to employees, to fund the income tax charge on that award of shares, before transferring the remainder  to the employee. This applies only where the employee fails to provide the employer with sufficient cash to pay the income tax charge.

Sportspersons’ tax relief

Professional cricketers can now on retirement avail of the sportspersons’ tax relief already enjoyed by other professional athletes. They can also qualify for a higher rate of relief on pension contributions.

CAPITAL ACQUISITIONS TAX (CAT)

The Group B (uncle, aunt, sibling, niece, nephew etc) CAT tax-free threshold is rounded up to €33,500 and the Group C (non-relatives) threshold rises to €16,750 with effect from Budget Day 7 December 2011

The annual pay and file date for CAT on Gifts & Inheritances is being moved back from 30 September to 31 October.

CAT Agricultural Relief

The three-year residence condition for CAT agricultural relief is being removed. This is in order to comply with EU Treaty provisions on freedom of movement of persons and capital.

A loan against a principal private residence will only qualify as a deduction for CAT agricultural relief purposes where the loan proceeds were used to purchase, repair or improve that residence.

Heritage Properties

The exemption from CAT on the gift or inheritance of heritage properties sold to State bodies will now include properties sold to cultural institutions funded by the Department of Arts, Heritage and the Gaeltacht.

STAMP DUTY

A self-assessment system will now apply to Stamp Duty is to be put on a self-assessment footing, in common with other taxes.

• A 30-day time limit will now apply to the stamping of a transaction.
• Revenue will have power to make Stamp Duty assessments, and new audit and appeal procedures will be introduced.
• The existing adjudication procedure will be abolished;

PENSION TAXATION

A number of changes are being made to relieve the often penal taxation that arises where the capital value of an individual’s pension benefits at retirement exceed €2.3 million (or a higher Personal Fund Threshold –PFT – if applicable).

RELEVANT CONTRACTS TAX

This Finance Bill gives legislative effect to the implementation of the new electronic Relevant Contract Tax (e-RCT) system from 1  January 2012.

REVENUE POWERS

The current general six-year requirement to keep business records will now also apply to liquidated and dissolved companies.

Payment Transactions Returns

Credit & Debit card merchant services and third party payment processors will now be required to make regular automatic returns to Revenue of all funds credited to traders. This is in response  to a suspicion that “some businesses may be underreporting card payment transactions.”

The penalties for deliberately or carelessly making incorrect income tax returns will now also apply to Domicile Levy and the Universal Social Charge returns

Tax Debts

A tax debtor may now be required to complete a statutory statement of affairs to demonstrate their ability or otherwise to pay debts to Revenue. Failure to do so will now be a Revenue offence. This is designed to stymie efforts by some debtors to hide assets in negotiations with Revenue.

Serious Tax Criminality

The Bill proposes extended Revenue powers to counter tax evasion and the black economy, focusing on serious Revenue offences. This includes oil laundering and cigarette smuggling, Relevant Contracts Tax scams, and major cross-border VAT and other frauds.

VAT

VAT on Bread

The range of breads eligible for Zero rate VAT is being extended to include loaves, rolls, batch bread, bagels, baps, blaas, burger buns, finger rolls, wraps, naan breads and pitta bread.

Other bread products which are reckoned to have “excessively high levels of sugar and fat” will remain liable for VAT at either the 13.5% or 23% rate. These include croissants, brioche and Danish pastries

VAT on Property

A number of minor changes are being made to the VAT rules regarding property.

• A reverse charge will now apply where construction services are supplied between connected persons.

•  Under the capital goods scheme, the adjustment period for ‘transitional properties’ will not revert to 20 years “where development has taken place and where that development constitutes a ‘refurbishment’ for VAT purposes”.

iXBRL FINANCIAL STATEMENTS

Corporation Tax returns can now include iXBRL (inline eXtensible Business Reporting Language) accounts.

The full text of the Bill is online, while the Dept of Finance Explanatory Memorandum and List of Items explain the changes in (relatively) plain English.

15 November is ROS ‘Pay & File’ Tax Return Deadline

Revenue have confirmed that the 31 October 2011 Pay & File deadline for 2010 Income Tax returns is being extended for online returns to Tuesday 15 November 2011 . Curiously, this year’s deadline is a day earlier than last year’s deadline of 16 November 2010.

To avail of the extended deadline for 2011, an individual  (or their accountant) must file their 2010 tax return by 15 November 2011 using the online ROS system.  In addition, they must also use the Revenue online ROS system to pay the following tax balances by 15 November.

• Preliminary Tax for 2011;  and
• Any remaining Income Tax balance due for 2010

Unless both:

• the return is filed on ROS; and
• the required tax payment is made using ROS;

the existing deadline of 31 October 2011 will applies to both the payment and the return.

In accordance with existing practice, I expect that the extended 15 November deadline should also apply for the purposes of RAC, AVC and PRSA pension payments, where a taxpayer pays & files via ROS by 15 November.  This would enable such pension payments, made by 15 November 2011, to attract backdated tax relief against 2010 tax liabilities.  However, these arrangements will become not a reality until and unless confirmed by Revenue  in the meantime – certainly don’t take this for granted without double-checking between now and October.

Thankfully, the Revenue eBrief announcement makes no mention of the recent abortive plan by the outgoing FF/Green government to bring the annual Pay & File tax return deadlines a month forward. Some of us are still having nightmares over that particular bright idea.

30 September Pay & File Plan ‘scrapped’

RTE News are reporting a claim from independent TD Michael Lowry that the Government have abandoned their plans to bring forward the annual  Pay & File tax deadline to 30 September, as part of the 2011 Finance Bill.

According to RTE, ‘Mr Lowry said that the Government also agreed not to bring forward the pay and file deadline of 30 September.’

This is very welcome news and avoids the nightmare prospect of an entire month being shaved off this year’s tax return season, as I highlighed last Friday.

Well done Mr. Lowry. And thank you…

 

The Finance Bill’s Pay & File Deadline Bombshell

The 2011 Finance Bill, which was announced this afternoon, includes a shock proposal to bring forward the annual ‘Pay & File’ tax deadline from 31 October to 30 September each year. The annual extension for ROS online returns is also being curbed from 16 days to 14.

I expect that this news will be greeted with dismay by most professionals and staff in accounting, tax and book-keeping firms.  At the moment, the annual ‘October rush’ tends to start in late August or early September.  Bringing the deadline timetable a month forward will mean that firms will now have to work at full throttle from the August holiday weekend onwards – not exactly in the spirit of  ‘family friendly’ working!

If implemented, the earlier deadline is also likely to cause hardship for many self-assessed taxpayers, who now have one month less each year to prepare their annual accounts and tax returns.

The paradox is that the tax return season is getting shorter just as the tax system is getting more complex. The recent proliferation of levies and stealth taxes, together with the multitude of curbs on tax reliefs and deductions, have made the tax system far more complicated than it was a few years ago. The prospect of further tax hikes in future Budget is likely to make this problem worse before it gets better.

The old Chinese curse ‘may you live in interesting times’ never seemed so apt…

Paper Tax Returns – 31 October deadline – last call…

Sunday 31 October is of course the deadline for filing paper ‘Pay & File’ income tax returns for 2009.

As this date falls on a Sunday this year, the Revenue Commissioners have confirmed that returns  submitted by post “with a postmarked date of 31st October” will  meet the filing deadline.

To be honest, I don’t know if any post offices open on Sundays, nor do I know many individuals with access to franking machines on Sundays, although I presume that this concession also applies to returns posted from Post Offices tomorrow, Saturday 30 October.

Revenue also state that returns can be manually delivered to their headquarters in Francis Street, Limerick over the weekend, although this facility will really only be  useful to taxpayers and agents in and around Limerick city.

Of course, the smart option is to prepare and file tax returns online via ROS, and avail of the extended deadline of 16 November.