Late Return of Tax Forms

[casie]

Due to some personal issues we completely missed the October deadline for submitting our tax forms for our rental property. As it stands I imagine we owe very little in tax due to it being empty for some months and the fact that rent we did get didn't cover mortgage repayments. I want to send in the forms this weekend. Can I expect a huge penalty ?
Thanks for replies.

 

[ClubMan]

Well you're going to have to do it sometime so better sooner rather than later. Due to issues beyond my control I filed a late TSO1 form this year and so far have not been asked to pay any interest or penalties. Perhaps Revenue are lenient if you declare/return even if it is slightly late? If in doubt get an accountant or tax practitioner to assist with the return in order to maximise your chances of mitigating any potential penalties.

 

[Kiddo]

I haven't done a tax return in a while but AFAIK there will be a surcharge of 10% of the tax due.

By the way you can only claim the interest element of the mortgage repayments against the rental income.

You mention personal circumstances..its no harm to enclose a cover letter stating why the return is late if this explains why.

 

[ClubMan]

If penalties are likely then all the more reason to get a good accountant/tax advisor on the case to do his/her best to help you mitigate any penalties.

 

[Berlin]

Revenue will charge you a 5% surcharge if your returns go in after 31/10 but before 30/11, and a 10% surcharge for late submission of returns after the end of November. (That's 10% of your final liability) In your case it sounds like that will be your only penalty. However, Kiddo is on the button - only the interest on your mortgage can be claimed, along with other property related expenses. You should find more info. on the Revenue website. If you employ an accountant, it may cost you more than a surcharge!

 

[ClubMan]

If you employ an accountant, it may cost you more than a surcharge!

But if you get your calculations wrong it may cost you more than the accountant's fee to get it right. I'm not an accountant by the way but would encourage the many people who are in the property business game but who seem to know very little about the relevant tax rules to get a professional on the job.

 

[San Martino]

In my experience Revenue do not usually charge PAYE workers for late submission of returns - I would be very surprised if you got any kind of surcharge or penalty (assuming you are PAYE!)

 

[Kiddo]

If penalties are likely then all the more reason to get a good accountant/tax advisor on the case to do his/her best to help you mitigate any penalties.

I am an accountant working in practice although I'm no longer involved in the tax side of things. The 10% surcharge in non negotiable..it applies automatically when the return is late...however if the taxpayer had good reason for the late return eg a berevment then the revenue may waive the surcharge.


In general Accountants/tax advisor would negotiate interest/penalties with the revenue for example where a revenue audit has taken place and the result is that the taxpayer owes income tax/vat/paye & prsi etc..revenue raise a liablility and the accountant would normally argue it down.

I take you point re people involved in property taking proper advise but IMO if you have one or two properties rented its easy enough to computate your tax liability..it doesn't take a genius to take the rental income for the year less allowable expenses and calculate 20%/42% of same...if the OP drafts up a comp and brings it into their local tax office someone there will have a look through it.

The big guns are needed when there are tax planning issues or CGT/CAT...most places I have worked in would charge €300/500 for a simple rent comp and filing the return.

 

[ClubMan]

it doesn't take a genius to take the rental income for the year less allowable expenses and calculate 20%/42% of same...

Yes - but I have seen (here on AAM and elsewhere) some real clangers in terms of property investors fundamentally misunderstanding their liabilities and how to calculate them. Even geniuses may not know the ins and out of the relevant tax codes and rules in which case they could (should?) ask an accountant/tax advisor for assistance.

 

[car]

The big guns are needed when there are tax planning issues or CGT/CAT...most places I have worked in would charge €300/500 for a simple rent comp and filing the return.

Is c300e about average for an accountant to charge for handling a PAYE workers tax returns. e.g. 1 rental property, a few shares, medical bills etc?

Anyone you'd recommend for same?