Unexpected Tax Bill

D

Donny

Guest
I am a PAYE tax payer and I self completed and returned my Form12 a few weeks ago. I was surprised to get a balancing slip from the Revenue today which shows me to have a tax bill of €866.

I've examined the numbers and it seems to be caused by the interest I declared on a deposit account. The ammount declared was €2530.

I was under the impression that interest was taxed via DIRT only, yet I've been taxed on top of that as if it was simple income.
Is this correct?
 
Did you complete the form correctly? If you did, the Revenue may simply have made a mistake in processing your return. This happens all the time. Ring them and find out.
 
Would have to agree totally with Tommy. In my opinion, revenue make many mistakes, which we, as accounts staff, have to rectify, at our expense. The latest one is where letters were recently issued from the revenue solicitor, threatening prosecution where taxpayers have failed to file 2002 tax returns, when in fact the 2002 tax return was filed months ago. The answer from the Dundalk district is that there was a problem recognising that returns filed through ROS were actually received, even though assessments had been issued.
 
Tax

I checked the photocopy I made of the completed form12. I entered the interest received in the box reletaed to interest received on which DIRT tax has already been paid. How much clearer can I make it? I even sent them the certs to show the tax was deducted! The Revenue.ie site says all tax liabilities on interest earned are discharged when DIRT is paid...yet they try to hit me for 42% of the remainder!?

Sounds like its more than just an error. Maybe they were hoping I'd just pay up without checking....I wonder how many grannies get ripped off like this every year.
 
Re: Tax

Hi Guys,

This is a subject close to my heart - I'm a company director and a couple of years ago my accountant asked me for a statement of interest on my deposit accounts because I might have a liability on the interest. I had always thought that once I had paid my DIRT tax that there was nothing extra due but my accountant insisted (and still does) that I have to pay tax on the balance rather like dividend income. Its not big bucks but it doesn't seem correct to me as it would mean that almost every working person in the state is guilty of tax evasion to some degree.

EB
 
Re: Tax

> I had always thought that once I had paid my DIRT tax that there was nothing extra due but my accountant insisted (and still does) that I have to pay tax on the balance rather like dividend income.

Unless the rules are different for company directors/self employed or this is not simply deposit interest then I reckon that you accountant is wrong. DIRT is the full extent of an individual's tax liability on deposit interest. It is not charged at one's marginal rate.

> it would mean that almost every working person in the state is guilty of tax evasion to some degree.

Very many people ARE knowingly or unknowingly guilty of small scale tax evasion through non declaration of their Credit Union interest/dividends for decades now!

[broken link removed]
 
DIRT

From the Revenue's own website:

"The payment of retention tax at the standard rate by individuals liable to income tax at the higher rate is regarded as satisfying the individuals' full liability to tax."

I've been filling in my Offline ROS Form 11 today, and it seems to treat this kind of income at the higher level. How mysterious! Must check that I haven't filled it in wrong...
 
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