Revenue scrap ROS online Amend Tax Return facility

Revenue have withdrawn their ROS facility to amend an income tax return online.

Back in September 2010, Revenue added a useful feature to their ROS site which allowed a user to amend online a previously-filed Form 11 Income Tax return.  At the time, I heartily welcomed this move and hailed it as ‘an important innovation’. In the intervening 20 months or so, I used it on a number of occasions, most commonly as a particularly easy way of claiming a tax credit or allowance that had been omitted from an original tax return.  I found the facility to be both useful and straightforward to use.

This morning I was reviewing the tax records of a client who had reached 65 years of age in late 2010 but hadn’t previously notified either myself or Revenue of this fact. He was therefore entitled to an Age Credit for 2010, along with PRSI exemption and partial Income Levy exemption for that year.

I accessed ROS to amend his 2010 tax return accordingly but I could not find any links to access the ‘Amend Form 11′ facility. A quick google search yielded a blank apart from my own blog post of September 2010 which outlined the steps involved in amending a return on ROS and a link to the relevant Revenue eBrief which was issued around that time.  I was dismayed to find the eBrief link was dead, bringing me to a ‘Page not found’ page within the Revenue.ie site.

Increasingly puzzled, I tried the ROS help section of ROS.ie and its ROS FAQ – Form 11 page which told me:

“Can I avail of ROS to file an amended Form 11?     
Unfortunately at this time if you have previously filed a Form 11, on either paper or through ROS, you will not be presented with the option of filing an amended return.”

Finally admitting defeat, I then had to resort to writing a letter to Revenue asking them to (i) update and amend my client’s 2010 Form 11 accordingly; and (ii)  issue a new Income Tax assessment including the Age Credit and exemptions. My letter has just gone off in the post. I expect that it will reach Revenue in 1-2 days time and they will presumably deal with it in due course. No matter how efficiently they manually process it, the service cannot match the speed and efficiency of the automatic ROS service.

I am disappointed that Revenue have withdrawn the facility to amend returns online via ROS, and it seems to be a retrograde step for everyone concerned.

It is doubly disappointing that they didn’t alert accountants and taxpayers of the move, choosing instead to merely delete the eBrief that had previously explained the feature. Maybe I’m expecting too much, but a fresh eBrief announcing the change would at least have made ROS users aware that the feature no longer existed – saving both their own and their clients’ time. Hopefully Revenue will reintroduce the facility before too long.

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.

Revenue extend Pay & File Tax Return Deadline

In a surprising move, Revenue have announced today that they have extended next week’s ROS online Pay & File Tax Deadline by 24 hours. The original deadline of Tuesday 15 November is now extended until midnight on Wednesday 16 November.

This new deadline covers the following

• online filing of Form 11 Income Tax Returns on ROS
• online payment of 2010 Income Tax liability
• payment of Preliminary Tax for 2011.

Today’s Revenue statement does not mention any extension to the deadline for making Pension/AVC contributions which qualify on a back-dated basis for tax relief for 2010. If you are considering making such a contribution in the coming days in order to obtain 2010 tax relief, I suggest that you do so by the original deadline of next Monday – at least until and unless Revenue confirm in the meantime that the pension relief deadline is also extended.

I have no idea why Revenue have at this late stage opted to extend the deadline by a day. Perhaps it is compensation of sorts for last week’s 31 October deadline for paper-filed tax returns, which fell on Bank Holiday Monday when Revenue offices were closed and many accounting and tax firms found themselves having to open on the Bank Holiday.

Either way, the deadline extension is very welcome, although it would have been simpler and easier for everyone concerned had this change been made months ago.  Spare a thought for your accountant or tax advisor if they have already made holiday or ‘quality time’ plans for Wednesday 16 November!

The ROS Technical Helpdesk will now be open until midnight on 16 November 2011.

Less Frequent Business Tax Returns on the way

Revenue have this week announced that more small businesses will be qualify for reduced frequency VAT, PAYE/PRSI, & RCT tax returns and payments in 2012.

With effect from 1 January 2012, businesses whose annual VAT bills are less than €3,000 will only be required to file VAT returns and pay VAT liabilities every 6 months. If their annual VAT bills are between €3,000 and €14,400, they will file and pay every 4 months.

In addition, employers and contractors whose annual PAYE/PRSI or RCT liabilities are less than €28,800 will be eligible to make quarterly P30 & RCT30 returns and payments.

Revenue state that this will mean improved cashflow and less form-filling for eligible businesses.

They will soon be writing to businesses that they believe to be eligible for these new arrangement. If you don’t hear from them, but feel that your business should be eligible, (for example due to falling turnover), you should get in touch with Revenue before the end of December.

2011 Form CT1 Corporation Tax Return now online

Revenue have today unveiled the ROS Form CT1 Corporation Tax Return for 2011.

For the first time ever, this year’s CT1 return includes an an optional facility to pre-populate the tax return with data extracted from the company’s CT1 tax return for 2010. This useful feature is included in both the ROS on-line and ROS off-line applications.

Online CT1 filing is now compulsory for most companies from 1 June 2011. Revenue have now also published a downloadable pdf-format paper CT1 return to facilitate the remaining companies who are still permitted to file paper returns.

Thankfully Revenue have now ceased the wasteful practice of mass-producing paper CT1 returns, most of which ended up in recycling bins.

For more, see todays Revenue eBrief on the 2011 CT1 return, and the recent eBrief on mandatory e-filing.  Revenue have promised to publish soon a further eBrief on how to use the pre-population facility on the new CT1 tax returns.

2010 Capital Gains Tax Deadlines Looming

If you made a Capital Gain in 2010 from selling or disposing of an asset, congratulations! Making a gain of any sort is quite an achievement in these difficult times.  That said, don’t celebrate for too long, as the deadline is looming for payment of your Capital Gains Tax (CGT) liability.

For Capital Gains arising in the period 1 January 2010 to 30 November 2010, the due date for payment is 15 December 2010. For gains made in the month of December 2010, the payment deadline is 31 January 2011.

Although these are very tight deadlines (as short as 15 days for a sale made in late November),  it is essential to meet them, as Revenue charge interest on late payments.

To make a payment to Revenue for the January – November period, download and complete a CGT payslip attach your cheque or draft payment, and forward it to The Collector-General, FREEPOST, Sarsfield House, Francis Street, Limerick.

If you dispose of property in 2010, you must also submit a tax return to Revenue in respect of the disposal. This can be done by using a Form CG1 or Form 11 tax return, and applies regardless of whether you have a CGT liability on the disposal.

The due date for filing such a return for 2010 is 31 October 2011.  Late- or non-filers are charged an additional surcharge of 5-10% of the liability, so it is very much in your interest to file on time.

The 2010 Form CG1 and Form 11 will not be released until early 2011, but the 2009 versions of these forms may be accessed here and here respectively.

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.

Income Tax returns can now be amended on ROS

The Revenue have just announced an important innovation for their ROS Tax Return system. For the first time, it is now possible to amend online a Form 11 Income Tax return that has previously been filed online on the ROS system.

Having tested the new facility today on ROS,  I have found it very simple and easy to use. I am convinced that it will be a very worthwhile and useful tool. It will save time, work and hassle for taxpayers, their accountants and indeed Revenue, in resolving minor glitches and omissions on filed tax returns.

To amend a return on ROS, just follow these steps:

1. Log on to ROS
2. In Client Services, click on the green ‘On-Line Return’ button
3. Under ‘Tax Type’ select Income Tax and under “Return Type’ select Form 11. Then click ‘Next’
4. You will then be taken through a series of screens, which are in the same format as the ROS online or offline modules for filing tax returns. You simply go to the relevant screen to make the amendment(s) to the previously submitted information.
5. Finally, you select the ‘Sign and Submit’ function at the end, apply your ROS digital signature and submit the revised Tax Return to Revenue.

A new Revenue eBrief on this topic lists some other key points to note.

• The Return Amendment facility is available only for Form 11 tax returns. It is not available for Form 1 or Form 1 (Firms) returns, nor (as yet) for other taxes.
• It is available only via the ROS on-line facility.
• It is available only for the tax year 2009 and subsequently.
• Tax returns may only be amended by the person (tax payer or their agent) who filed the original return.
• It is only possible to amend each return twice. Further changes are not allowed once two amended returns have been filed.
• Not all Form 11 fields can be amended.  All ‘forbidden’ fields that cannot be changed will be ‘greyed out’.
• If a return has been selected for Revenue audit, all fields will be ‘greyed out’ and no changes will be possible.
• Revenue also point out that it will still be possible to request changes to tax return data by letter, email etc.

This is a very promising new feature for the ROS system. Hopefully it will be a success and will be extended to all categories of tax return in the near future.

Gifts and Inheritance Tax – Big Changes from 14 June

Capital Acquisitions Tax (CAT) is the tax which is levied on gifts and inheritances. The December 2009 Budget announced some major changes to how this tax is administered. These changes come into effect on 14 June next.

The main changes are as follows:

• The annual Pay & File deadline of 31 October, that already applies to Income Tax, will now also extend to CAT on gifts and inheritances. Where a person receives a gift or inheritance between 1 September and 31 August in a given year, they are obliged to file a gift/inheritance tax return (Form IT38) with Revenue, and pay any liability arising, by the following 31 October.

• The IT38 tax return must be filed online using the Revenue ROS system, except in a very limited range of circumstances, where a new paper form, Form IT38S, can be used.

• Where a person has received a gift or inheritance since 1 September 2009, their deadline for paying their CAT tax liability and making their Form IT38 tax return is now extended to 31 October 2010 provided they pay & file online on ROS.  The same deadline also applies to gifts and inheritances received between now and 31 August next.

• Where a person receives a gift or inheritance in the period between 1 September 2009 and 31 August 2010, they must pay the tax and file their return by 31 October 2011.

Revenue have today published a detailed notice explaining the changes.

Barack Obama’s Tax Return is online

US President Barack Obama’s 2009 Income Tax return has been published online.  On 15 April, the tax return deadline day for all U.S. citizens, the details of Mr. Obama’s tax return were officially released by the White House.   It makes interesting reading.

The return tells us that the  President earned  over $5 million in 2009 from his activities as an author. His books “The Audacity of Hope” and “Dreams from My Father” have sold in massive volumes worldwide.

President Obama’s gross earnings from this source amounted to $5,661,666, against which he claimed deductions for $471,022 in “commissions & fees”,  $866 for “office expenses” and a princely $279 for “other expenses”.    The President’s total tax bill for 2009 amounted to $1,792,414, or about 32% of his income.

His bill would have been a lot smaller had Mr. Obama been in a position to use the Irish tax exemption for authors of “original and creative” works.  Frankly, I am surprised Bertie Ahern forgot to tell him.