Time limit on Revenue chasing declared tax?

H

Harryblack

Guest
I was self employed for a few years therefore paid my tax for each year based on the previous year's earnings. However in 2008 I earned a significant chunk more than expected. I declared that I owed Revenue more tax for 08 when I did my tax return for 2009; however I still haven't received a bill from them regarding my outstanding balance.

Do Revenue have an indefinite amount of time where they can chase me for this, even though I have declared it and it is their fault that they haven't billed me for it?
 
Have you received a notice of assessment for the year in question?

If so then that is your "bill" in effect. Just because they haven't pursued you for it yet doesn't mean you don't / won't owe it, I'd suggest you engage with them as to how to deal with it, otherwise if and when they come looking for it you could find yourself owing a substantial amount of interest...
 
I haven't received anything from them regarding the 08 tax year since I declared my earnings for that year. I returned to PAYE at the end of 2009 and at some point after that my Accountant did my tax return for 09 along with adjustments to my 08 return. The Revenue sent me notice of my liability for 2009 but not 2008. I was in touch with her a few times about sorting out my 08 bill, but she said to wait until I heard from the Revenue before sorting it (in other words she was saying don't bother paying unless they come after you).

I'm in two minds; on the one hand I have done everything above board and feel that it is the Revenue's problem if they haven't chased me for it but on the other hand I don't want to be handed a bill in a few years time.
 
Harryblack said:
I haven't received anything from them regarding the 08 tax year since I declared my earnings for that year. I returned to PAYE at the end of 2009 and at some point after that my Accountant did my tax return for 09 along with adjustments to my 08 return. The Revenue sent me notice of my liability for 2009 but not 2008. I was in touch with her a few times about sorting out my 08 bill, but she said to wait until I heard from the Revenue before sorting it (in other words she was saying don't bother paying unless they come after you).

I'm in two minds; on the one hand I have done everything above board and feel that it is the Revenue's problem if they haven't chased me for it but on the other hand I don't want to be handed a bill in a few years time.
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OK now I have a couple of different concerns:

My original question still stands - have you (or your accountant) received a Notice of Assessment for the 2008 tax year. This states what your income and the tax due on it, are for the year.

If you have submitted a true return of income for the year, and Revenue has received this, then there is a time limit (either 4 or 6 years) after which they are "out of time" to raise an assessment on you, and you will actually be off the hook. But this just doesn't happen in reality, since everything is now computerised... if a return was sent in, an assessment (or "bill") will issue. That's not to say they'll come after you for it straight away, but it'll stay there visible, and one fine day, you'll want to claim / transfer a tax credit, or claim for medical expenses or something, and the person in the tax office will say, "um... there's a balance outstanding on your account of XXX since 2008".

So, this brings me onto the other concern - how reliable is your accountant? Now I don't mean to scaremonger, but variations on the following theme have been known to happen, due to a combination of greedy, dishonest accountants and apathetic, naive clients...:

  • Client gives shoebox of records to accountant
  • Accountant does accounts / prepares tax return
  • Tells the client, you owe the taxman 10k
  • Client writes a cheque, gives to accountant
  • Accountant pockets the cheque in part or in full
  • Accountant submits a return to Revenue stating much less / no tax owed.
  • Client never sees the assessment that issues, as they just put anything with a harp on it into the shoebox for the accountant.
  • This goes on for any number of years until something happens to bring it to light.
  • Accountant manages to evade conviction, as fraud is so damn hard to prove.
  • Client still owes all the money to Revenue, because it's not Revenue's fault the client got sold a pup. And the chances of getting the money back from the accountant? Ha, good one!
My advice - don't stick your head in the sand pal. Ask your accountant to do the job they've been paid to do, and clarify exactly what the story is, and make sure you see the paperwork that backs up what they're telling you.
 
Harryblack said:
Do Revenue have an indefinite amount of time where they can chase me for this, even though I have declared it and it is their fault that they haven't billed me for it?
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My understanding is that there is no time limit for revenue to chase tax.
 
There is no time limit for them claiming tax due whether it is your fault or theirs. There is only a time limit for you to claim tax back. Ring them and ask them to sort it out.
 
mandelbrot said:
So, this brings me onto the other concern - how reliable is your accountant? Now I don't mean to scaremonger, but variations on the following theme have been known to happen, due to a combination of greedy, dishonest accountants and apathetic, naive clients...:

  • Client gives shoebox of records to accountant
  • Accountant does accounts / prepares tax return
  • Tells the client, you owe the taxman 10k
  • Client writes a cheque, gives to accountant
  • Accountant pockets the cheque in part or in full
  • Accountant submits a return to Revenue stating much less / no tax owed.
  • Client never sees the assessment that issues, as they just put anything with a harp on it into the shoebox for the accountant.
  • This goes on for any number of years until something happens to bring it to light.
  • Accountant manages to evade conviction, as fraud is so damn hard to prove.
  • Client still owes all the money to Revenue, because it's not Revenue's fault the client got sold a pup. And the chances of getting the money back from the accountant? Ha, good one!
My advice - don't stick your head in the sand pal. Ask your accountant to do the job they've been paid to do, and clarify exactly what the story is, and make sure you see the paperwork that backs up what they're telling you.
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Very important advice for all AAM users who engage accountants:

If you use an accountant or tax advisor to prepare your tax returns and deal with Revenue on their behalf, never, ever, ever pay your tax liability to them, either in cash, cheque or by any other means.

All tax payments should be made with a draft, cheque or online by ROS from your bank account.

All accountant's or tax advisor's fees should be paid separately to the person or firm involved.

If your accountant or tax advisor asks you to pay your tax bill to them, (along with or separately from your payment of their fees), do not do this under any circumstances. In fact, you should probably report any such requests to their professional body. If they have no professional body, consider reporting them to IAASA.
 
Thank you for all the replies. My Accountant is definitely not on the fiddle! I havce receipts for everything and my cheques have always been made out to the Collector General.

The only notice of assessment I have for 08 is not up to date; in fact it states I overpaid my taxes for that year which I know is definitely not the case. It includes an incorrect incoem amount.

So basically there is no time limit; that was what I was wondering.I have the money sitting there waiting for when they get in touch with me. I might just ring them and ask them to sort it though.
 
Harryblack said:
The only notice of assessment I have for 08 is not up to date; in fact it states I overpaid my taxes for that year which I know is definitely not the case. It includes an incorrect income amount.
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In that case, the onus (under self-assessment) is on you, or your accountant, to notify them accordingly.
 
Harryblack said:
.I have the money sitting there waiting for when they get in touch with me. I might just ring them and ask them to sort it though.
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You're probably wasting your time ringing but try that as a first step. It's awfully difficult to get things sorted in revenue when the 'computers' have a problem. But sort it you must or it will come back to bite you.
 
Don't bother phoning. If the person you phone 'forgets' to process your request, the matter won't be dealt with and the problem will go unresolved. At least if you write, and keep copies, you can use this as a basis to argue for mitigation of interest/penalties on arrears if this becomes an issue at a later stage.
 
Just to answer the original question, I thought revenue did have a time limit of 7 years in which to claim tax owed? And that it was 4 years that an individual has to claim back rebates?

... and to answer my own question, it seems 7 years is not the case, it seems there is no limit as others have stated. I found a few threads stating this, including one from the AAM archives
 
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