- Self Assessment – Pay and File
- Payment and Compliance
- Joint Assessment
- Pay and File Summary
- Information included in Return
- Late Filing of P.A.Y.E. Returns
- Registration of Foreign Employers
Self Assessment – Pay and File
On the 31 October each year, a self-employed individual/company director, PAYE worker with untaxed non PAYE income will be required to:
- Make his/her Income Tax Return for the previous calendar year;
- Pay the balance of tax for the previous calendar year; and
- Make a Preliminary Tax payment for the current calendar year.
Payment and Compliance
The self-assessment system applies to individuals with non-PAYE income and to all directors controlling 15% or more of the share capital of a company (even if their entire income is subject to PAYE).
For 2010, PAYE credit for proprietory directors will be limited to that actually paid by the company.
The definition of a chargeable person for self assessment purposes includes PAYE taxpayers with non PAYE income where the non PAYE income is not taken into account under the PAYE system.
The system places an obligation on the individual to file a return, calculate the tax liability, and pay the tax due. Returns for income arising in the year ended 31 December 2011 must be filed on or before 31 October 2012 to avoid a surcharge. The surcharge amounts to 5% of the amount of tax payable for the period subject to a maximum surcharge of €12,695, where the return is filed within two months of the deadline. Otherwise if the return is filed more than 2 months after the deadline, a surcharge of 10% is imposed subject to a maximum of €63,485.
Preliminary tax due for the tax year 2011 must be paid by 31 October 2011 if interest charges of .0219% per day are to be avoided. The tax paid must represent 90% of the individual’s actual liability for 2011 or 100% of the final liability for 2010 (excluding BES relief and relief for investment in films).
Individuals making a preliminary tax payment in 2011 based on 100% of their 2010 liability will be obliged to include in that payment the amount which would have been payable had the Universal social Charge applied in 2010.
Alternatively, for the tax year 2011, a taxpayer can elect to make a preliminary tax payment equal to 105% of the ultimate liability for 2009 (the pre-preceding year), provided a liability arose in that year. This option is only available to taxpayers that pay by direct debit in equal monthly installments. The final installment is payable in December 2011. Where a taxpayer is paying by direct debit for the first time, payment can be made by way of a minimum of three equal installments, and during the following year by way of eight equal installments.
Any balance of tax due for 2011 must be paid by 31 October 2012 (2010 balance falling due by 31 October 2011).
Where the repayment is made due to a Revenue error in applying the legislation, interest will be repaid from the date the tax was paid to the date of repayment otherwise no repayment is due Refunds of overpayments of preliminary tax carry interest of 0.011% per day .
Tip: The 2010 tax return is due to be filed by 31 October 2011, where your total income for 2011 is less than that in 2010, consider basing your preliminary tax payment on your 2011 estimated liability.
No interest relief will be available for loans taken out on or after 7 December 2010 to invest in certain trading companies. For loans described above which were taken out prior to 7 December 2010, interest on such loans will be deductible on a reduced basis as follows:
- 75% in 2011
- 50% in 2012
- 25% in 2013
- No relief will be available for 2014 onwards.
The relief is subject to the high earners restriction as outlined in page –.
Rented Residential Property
With effect from 7 April 2009 there is a restriction on the tax relief available for interest paid on borrowings used to purchase or improve rented residential property. Relief will be restricted to 75% of the amount of interest paid; this will apply to both new and existing borrowings. Commercial properties will not be impacted by the change
Joint Assessment
Revenue may recover tax not paid within 28 days from the spouse who was not assessed. This is limited to the amount of unpaid tax referable to that spouse’s income.
Pay and File Summary
The following is a summary of pay and file dates for the year 2011
- File tax return for 2011 – 31 October 2012
- Pay capital gains tax for 2011 -
- 1 December 2010–31 December 2010 – 31 January 2011
- 1 January 2011-30 November 2011 – 15 December 2011
- 1 December 2011-31 December 2011 – 31 January 2012
- Pay balance of tax for 2010 — 31 October 2011
- Pay preliminary tax for 2011 – 31 October 2011
Information included in Return
Taxpayers are required to disclose information in relation to any relief’s claimed in their annual tax return, the relief’s to be detailed are highlighted on the return forms. This will apply to individuals, both self-employed and employees and also to companies.
Failure to provide the relevant information may result in a penalty of €950, as well as a surcharge of 5% of the tax due subject to a maximum of €12,695 – within two months of specified date, or 10% of the tax due subject to a maximum of €63,458 – where return is filed more than two months after the specified date.
Late Filing of P.A.Y.E. Returns
The penalty for late filing of the employer’s end of year return (P.35) is an initial €1,000 with further monthly penalties of €1,000 up to a maximum of €4,000.
Where PAYE is paid later than 14 days after the end of the year of assessment, interest will be payable and calculated as follows:
- Where the balance due does not exceed 10% of the total liability, interest will be due as if the date for payment was the 14th day after the end of the tax year; or
- Where the balance exceeds 10% of the total liability, interest will be due on 31st of July (in the year of assessment).
Registration of Foreign Employers
PAYE must be operated by non-resident employers and intermediaries in certain circumstances. Where an employee works for a person other than his/her employer, and a payment is made by the foreign employer in respect of that work, then Irish PAYE must be operated on the payment. The obligation to register for PAYE covers foreign and domestic employment and mobile workers.
PAYE may also be required to be operated by foreign employers or Irish affiliated employers where an employee of a foreign company spends time (generally more than 60 days) working in the State. However there are certain concessions where the individual does not become tax resident and specified conditions are satisfied.
