Self-assessed taxpayers rush to meet filing deadline

Self-assessed taxpayers all around the country are today frantically trying to finalise their 2014 tax return ahead of Thursday’s November 12th filing deadline. And find the cash to settle their tax bill.

According to the Revenue Commissioners, about 450,000 tax returns are expected to be filed for the 2014 tax year, and the vast majority of these, or about 90 per cent, or some 400,000, will be filed via the online Revenue’s Online Service (ROS). While taxpayers have had since last January to prepare their returns, a significant number wait until the last minute - last year some one in six waited until the very last day to file.

If you have yet to file your return, here are some pointers:

Changes this year

One big change for those filing returns for 2014 – and who are not self-employed – is the introduction of PRSI at a rate of 4 per cent on “unearned” income for PAYE taxpayers.

First signalled back in 2012, this measure is finally coming to pass, and applies to unearned income from January 1st 2014. Self-employed people have already been paying this additional tax, but the change may be another cost so-called “accidental landlords” must bear.

You can avoid the PRSI charge if you’re over 66, or if you are deemed to be a “chargeable” person by Revenue, which means that your total unearned earnings, derived from rental income or interest on deposits etc, should not exceed € 3,174 a year.

When it comes to rental income, remember that it’s your profit, rather than total earnings, which are important. So, if you have total rental income of €5,000, but a “profit” of just €3,000, you won’t have to account for PRSI.

Savings of € 160,000 in savings earning interest at 2 per cent would also put you in this category, with interest of about € 3,229 a year.

Budget 2016

Although last month’s Budget made an effort to make the tax system more equitable for those who work for themselves, and those who get paid through the PAYE system with the introduction of a new € 550 tax credit, self assessed tax payers will have to wait until October/November 2017 to claim the credit.

How to pay

If at all possible, don’t miss Thursday’s deadline to pay and file. Doing so runs the risk of facing a penalty of a 5 per cent surcharge if you are less than two months late in filing a tax return, rising to 10 per cent thereafter.

There are a number of ways to settle your tax bill, including via a debit card, a ROS Debit Instruction (RDI) or direct debit.

If possible, try not to settle your bill by credit card. On top of any fees your bank might charge you if you can’t repay it within 30 days, you’ll also pay a transaction charge of 1.49 per cent on the value of your pay bill. Or in other words an extra €300 on a €20,000 tax bill, so avoid.

Help!

If you need help, you can email Revenue @ roshelp@revenue.ie; telephone at 1890 201 106; or, if you live abroad, you can either call call +353 1 7023021 or email the helpdesk with your number someone will call you back.