Late Filing Surcharge

J

joe2010

Guest
Hi
Like everyone else I am hoping someone can help with a question!
I am a proprietary director of a company (own over 15%) and am obliged to do a self assessment return. I made my return for 2009 and had a payment to make based on rental income from a house purchased in late 2008. I made this return and also paid preliminary tax for 2010.
I had no tax liability to pay in 2007 (PAYE only) and 2008 (rental income much lower then interest on loan paid). I understood our work accountant to have made my nil returns for 2007 and 2008 but he in fact had not. After receiving a letter advising me to do these I did them as necessary with both having no liability as all PAYE paid within them years. I got a further instruction from revenue advising that I need to pay a late filling charge which equates to 10% of the PAYE I already paid within them years. This is because I was late filing.
Is this the case and is their any chance to appeal this. The surcharges are about 3000 for each year so I would like to avoid if I can and get a new accountant to undertake my returns.
I spoke to someone who advised that the late filling penalty is in place if you havent paid the PAYE but I think they are wrong. They mentioned something about a €125 fine for being late if you have already paid your PAYE within both years.

If anyone has any clarification I would greatly appreciate it. €6000 surcharges is a lot of money to pay after tax I have already paid. That said I understand rules are rules.
 
What was the reason you were director of that company ie is it your company?

What is your shareholding?

I seem this charged for a person in similar position for a couple of late director returns- The tax office position was to pay up firstly and them make an appeal.(at time person also needed tax clearance so could not drag out)

I recollect that we did get some reduction on appeal

Below is history of it

History of it on first link


www.revenue.ie/en/practitioner/law/sp-it-1-93.doc


reminder on issue25 tax briefing 25 page 16 1997


[broken link removed]
 
Thanks for the quick response Paperview. Yes, I am a 50% shareholder / owner in company. Just seems harsh to have to pay 6K when liability was nil.
 
Unfortunately you are a victim of one of the most arbitrary and (in my opinion) unfair rules in our tax code.

Due to the large amounts involved you should definitely seek a concession from Revenue. Perhaps you should also seek a specialist tax consultant's advice on your options before doing so.
 
joe2010 said:
Hi
Like everyone else I am hoping someone can help with a question!
I am a proprietary director of a company (own over 15%) and am obliged to do a self assessment return. I made my return for 2009 and had a payment to make based on rental income from a house purchased in late 2008. I made this return and also paid preliminary tax for 2010.
I had no tax liability to pay in 2007 (PAYE only) and 2008 (rental income much lower then interest on loan paid). I understood our work accountant to have made my nil returns for 2007 and 2008 but he in fact had not. After receiving a letter advising me to do these I did them as necessary with both having no liability as all PAYE paid within them years. I got a further instruction from revenue advising that I need to pay a late filling charge which equates to 10% of the PAYE I already paid within them years. This is because I was late filing.
Is this the case and is their any chance to appeal this. The surcharges are about 3000 for each year so I would like to avoid if I can and get a new accountant to undertake my returns.
I spoke to someone who advised that the late filling penalty is in place if you havent paid the PAYE but I think they are wrong. They mentioned something about a €125 fine for being late if you have already paid your PAYE within both years.

If anyone has any clarification I would greatly appreciate it. €6000 surcharges is a lot of money to pay after tax I have already paid. That said I understand rules are rules.
Click to expand...

Unfortunately, the late filing surcharge is 10% of your tax liability BEFORE credit for any PAYE paid.

Send a letter to Revenue requesting that they concessionally waive the surcharge on the basis that:

- No balance of tax payable arose in respect of 2007 or 2008,

- The hardship that surcharges of €6,000 would cause to you and your family in these recessionary times,

- There was a mix up between your company's accountant and you, and

- You undertake to be a compliant taxpayer in respect of 2009 et seq.

Best of luck.
 
What people are saying about writing to get the surcharge removed will probably work. It shouldn't but it probably will. This is what is wrong with the Revenue. They have all these rules and then they do not implement them or they pick and choose who they enforce against on an arbitrary basis depending upon what side of bed they got out off in the morning or whether you know someone in the tax office. Corruption. You were late. If the revenue ignore these rules then the whole system is a joke. What do the people that do submit their returns on time think? Lets ignore the rules you wont get punished anyway. Then there is a huge backlog of returns. The Revenue also ignore the rule on underpaid preliminary tax. The tax compliant taxpayer pays the correct preliminary tax and the non compliant does not but does not get an interest charge unless the tax liability is very high. Where is the fairness there?
 
simplyjoe - while I appreciate that rules are rules, Revenue are not actually out of pocket here because the tax has been paid on time throughout the year.

An underpayment of preliminary tax is a different matter altogether

IMO a flat fine (of say €500 per return) would be more appropriate
 
I understand what you say but I dont think it should be down to individual inspectors/revenue officers to bend the rules. If force majeure or inability to pay is needed this should only be dealt with by an independent board or assessor. If the rule is wrong it should be changed not just broken whenever someone thinks it should be. This just leads to anarchy or corruption.
 
simplyjoe said:
What people are saying about writing to get the surcharge removed will probably work. It shouldn't but it probably will. This is what is wrong with the Revenue. They have all these rules and then they do not implement them or they pick and choose who they enforce against on an arbitrary basis depending upon what side of bed they got out off in the morning or whether you know someone in the tax office. Corruption. You were late. If the revenue ignore these rules then the whole system is a joke. What do the people that do submit their returns on time think? Lets ignore the rules you wont get punished anyway. Then there is a huge backlog of returns. The Revenue also ignore the rule on underpaid preliminary tax. The tax compliant taxpayer pays the correct preliminary tax and the non compliant does not but does not get an interest charge unless the tax liability is very high. Where is the fairness there?
Click to expand...

Not anymore. Revenue are now far more militant when it comes to applying interest to preliminary tax underpayments.

Revenue seem to accept that the proprietary director/PAYE late filing surcharge rule is ridiculous.
 
BazFitz said:
Revenue seem to accept that the proprietary director/PAYE late filing surcharge rule is ridiculous.
Click to expand...

The rule is indeed ridiculous. Taxpayers would have fewer objections complying with if it wasn't so (a) blatantly discriminatory, or (b) disproportionate. As it stands, it merely brings both Revenue and the tax code into disrepute.
 
10% surcharge for late filing on total or late amount?

Hi all,
I was late filing my 2009 tax returns (filed in Jan 2011, should have filed by Oct 2010) but had paid preliminary tax of 90% of the 2009 tax due on time in Oct 2009. Due to this late filing, I received a surcharge demand of 10% of the total tax payable for 2009.

[By the way, the tax was purely on rental income on a house I purchased and lived in myself but then couldn't sell when my job moved to another town so I am lucky enough to be receiving rental income that almost covers the mortgage - this info being totally unnecessary, just emphasising that I'm not a property developer, or multiple property owner or anything of the sort!].

My question is whether, as I paid the 90% preliminary tax on time, and was therefore only late in the actual filing of the official return and payment of the final 10% tax, I have any case at all in terms of appealing that the surcharge should only be only the tax I was late paying, and not the entire amount?
 
gombeen99 said:
My question is whether, as I paid the 90% preliminary tax on time, and was therefore only late in the actual filing of the official return and payment of the final 10% tax, I have any case at all in terms of appealing that the surcharge should only be only the tax I was late paying, and not the entire amount?
Click to expand...

Unfortunately, no.

If there are any mitigating factors outside your control that left you unable to file on time, you can make a case to Revenue on that basis.
 
You must log in or register to reply here.
Back
Top