We’ll look at 10 last-minute tips to help with your Income Tax returns. It’s a busy time of year in the office. Training is on hold. Tea breaks are shorter, and lunches just about happen. The Tax Return deadline is looming. Accounts for review and finalise. A few weeks to go till the deadline hits. The focus will be on
- Engage with your advisor
- Know the deadlines
- Technical support
- Bank accounts
- Claim everything but have backup
- Don’t make up numbers
- Funds in the account
- ROS inbox
Engage with your advisor
Take action and engage with your advisor. Get the information they need to them ASAP. Not some of the information, but all. Fill in the checklist that they send you. That helps them and helps you too. If you arrive in on the 14th of November with a box of receipts don’t expect your tax return to be with Revenue on the 15th.
We’ll do our best for clients that work with us. Engaging with your advisor early helps you too as you can plan better. You’ll know
- What your liability is and when to pay it
- If you can reduce it with a pension top-up
- What preliminary tax to pay
- You have minimised your liability by claiming what you can
Know the deadlines
You have to know the deadlines. They are the
- 31st of October for filing your Income Tax Return
- 15th of November if paying and filing through ROS
If you are not in funds to pay you should file your return by the 31st of October. The extended deadline is available once you pay and file through ROS. Missing the deadline means more tax to pay as surcharges kick in. But remember the clock starts from the 31st of October not the 15th of November. If you file your return
- Within 2 months [31 December 2023] of the 31st of October the surcharge is 5%
- After 2 months [1 January 2024 onwards] the surcharge is 10%
Those dates are also the deadlines for your Capital Gains Tax return for 2022 and your CAT return. This is where you got a gift or inheritance in the period from 1 January to 31 August 2023 and you have to file a return.
The key message is don’t be late. Especially if you are a company director that owns more than 15% of the company. The surcharges are worse for you.
If you are filing your own return, check if you can access ROS. It could be a year since you were on it, so make sure you can get in. You may need to upload a new digital cert, or you forgot your password. Get on to Revenue Technical support for help. They released a recent e-brief that has a lot of useful numbers and ways to contact them.
Asking your advisor what your favourite film is so you can retrieve your password is not advisable! It won’t go down well when they are under pressure as this is stuff you need to sort out. As Dee would say in the office. “It’s time to put your big boy pants on.”
That e-brief also has contact numbers and My Enquiry details to contact Revenue. This covers other issues too, like bank accounts and payment enquiries.
Do you have a KBC or Ulster Bank account and haven’t changed it on the Revenue system? If so, you’ll need to update your bank account details on ROS to enable you to make payments and get refunds.
The following message appears in ROS in yellow where you have an Ulster Bank or KBC account.
If you have recently changed banking provider, please update your bank account details in Manage Bank Accounts below. Note that payment, RDI, Direct Debit & Refund details are stored separately, so please update all bank details that are required.
When setting up a bank account on ROS for Revenue to take payments, you need an Irish current account. A deposit account won’t work.
Local Property Tax
It’s a must that your Local Property Tax [LPT] return and payments are up to date before filing your Tax Return. Failure to sort that will lead to an LPT surcharge that Revenue will insist on collecting. Even if you sort out your LPT after you submit your return, they will still collect the surcharge.
As a result, you’ll end up paying LPT on the double.
As part of our tax return process, we send out a cover letter to each client setting out
- What their liability is for 2022
- Less the amount of preliminary tax paid for 2022
- The balance owing for 2022
- Preliminary Tax amount for 2023
In most cases, the client will be in a position to pay the balance owing for 2022 and preliminary for 2023.
We will then process those payments for the 31st of October or the 15th of November. Let’s look at an example. John Knowles has several rental properties and files his tax return every year. His liabilities are as follows.
|Tax liability 2022||€15,000|
|Less Preliminary Tax 2022||(€10,000)|
|Balance owing for 2022||€5,000|
|Preliminary Tax 2023||€15,000|
John has only got €10,000 but will have more funds in December. I’d suggest that he clears the 2022 liability in full and pays €5,000 towards 2023 preliminary tax. As he’s paying and filing online, he can avail of the 15th of November deadline. In December he should then top up his preliminary tax payment by €10,000 to meet his obligations.
The priority would be to clear the balance owing for the last tax year. If John didn’t have any funds to pay, then he would need to file his return by the 31st of October. Once he does that an assessment will issue from Revenue and they’ll look for payment. He’ll need to engage with Revenue shortly after that to get a payment plan in place.
Claim everything you can claim once it’s right to claim it. But, have backup. John paid Jimmy €500 for painting one of his apartments. Should John claim that? I’d ask two questions.
- Does John have an invoice or receipt for the expense?
- How did John pay for it? Was it cash, cheque, or bank transfer?
When there’s no invoice and a cash payment, I wouldn’t claim it. Otherwise, I would. A bank transfer or cheque will appear on your bank statement and that is some form of proof. It’s best to have as much backup as you can but isn’t always possible when trying to get paper from a handyman!
Make sure you claim all your tax credits and reliefs. The rent tax credit is available in 2022 for the first time. We claim this for clients who are paying for student accommodation in third level. And for clients renting their home. It’s worth up to €1,000 for a married couple and €500 for a single person.
Other tax credits & reliefs that people can miss out on, especially when they do their own tax returns, are
- Earned Income Credit for self-employed
- PAYE Credit for employees
- Home Carer Credit where a spouse/civil partner looks after dependants
- Health expenses
- Single Person Child Credit
- Pension Payments
Missing out on any of these credits can lead to larger tax liabilities or lower refunds. You don’t want Revenue having more of your money than they should! It would be like watching The Notebook. Floods of tears everywhere!
Don’t make up numbers
You as the taxpayer must file a correct return. Code for don’t make up numbers. As the Two Johnny’s would say “It’s not worth it lads”.
Revenue come calling someday and ask for your medical receipts that make up the €5,000 claim. You got tax relief of €1,000 on that claim. If you don’t have the backup then you are in bother. You have filed an incorrect Tax return and you have made an illegal claim for a tax credit. There are a couple of offences here and Revenue will come down heavy on you. All the horrible words like penalties, surcharge and interest come into play.
We see this in a few cases. Round sum numbers for medical expenses and rental repairs. It’s a red flag for us. There’s no point claiming something that you didn’t pay. Or paid but couldn’t be bothered to get the correct number. Our job is to
- Protect our clients to make sure their tax return is right and to
- Minimise their tax liabilities by claiming everything we can claim
Having everything right is key for us. Plus, a huge advantage for the client too. They are happy to be tax-compliant and know they have nothing to worry about should Revenue come knocking.
Funds are in the account
Like in Father Ted don’t have funds resting in the wrong account. Once you know what you have to pay and when, make sure the funds are in the account so Revenue can take the payment. That can involve moving money from a deposit account to a current account. Or making sure the tax loan you get is in your account for the 31st of October or 15th of November.
You should be clear on what you have to pay and when. Plus, the account that you have with Revenue to take the money.
If Revenue go to take the tax owing but the funds aren’t available, they’ll try and take it at a future date. You may not be aware that they tried to take the payment on a couple of occasions. Revenue will escalate these cases to final demand payment stage quite quickly.
In our cover letters to clients, we’ll confirm the payment dates. That’s the date we’ll tell Revenue to take the payment for. Don’t panic when you wake up on the 1st or 16th of November and your money is still there. It will take Revenue a few days to access the money so give it a week after the deadline. If they don’t take it, then get back to your advisor or Revenue to sort soon after.
Keep a close eye on your ROS Inbox after you file your return and after the deadline. This is a time when a lot of correspondence will come from Revenue, to include
- Income Tax return assessment
- Capital Gains Tax return assessment
- Statements of tax paid and refunds owing
- Demand letters
Make sure you check the assessments that issue so they agree with the returns. Statements are important, especially in a refund situation. You won’t get a refund until a statement issues first. The higher the refund the longer it can take a statement to issue. Revenue, being the minders of the public purse, will cross-check the larger refunds.
The 7-day final demand letters are serious. You can imagine you are sipping vodka martinis on a resort in the Canaries, and all is wonderful with life! Back home Revenue are sending your details to the Sheriff to collect what you own them. They are expensive cocktails when you add in the tax, the interest, and the Sheriff’s fees.
You’ll be poorer but have a nice tan!
Protecting our clients and minimising their taxes is important to us. Do you need that type of service? If so, Start here