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SELF ASSESSMENT FOR INDIVIDUALS

By Noone Casey

Self Assessment – Pay and File

On the 31 October each year, a self-employed individual/company director, PAYE worker with untaxed non PAYE income will be required to:

  1. File his/her Income Tax Return for the previous calendar year;
  2. Pay the balance of tax for the previous calendar year; and
  3. Pay preliminary Tax payment for the current calendar year.
  4. Submit a tax computation at the time of filing the return.

Payment and Compliance

The self-assessment system applies to individuals with nonPAYE income and to all directors controlling 15% or more of the share capital of a company (even if their entire income is subject to PAYE).
The definition of a “chargeable person” for self-assessment purposes includes PAYE taxpayers with non-PAYE income where the non-PAYE income is not taken into account under the PAYE system.
The “Pay and File” system places an obligation on the individual to file a return, calculate the tax liability, submit a tax computation and pay the tax due. Returns for income arising in the year ended 31 December 2022 must be filed on or before 31 October 2023 to avoid a surcharge. The surcharge amounts to
5% of the amount of tax payable for the period subject to a maximum surcharge of €12,695 where the return is filed within two months of the deadline. Otherwise if the return is filed morethan two months after the deadline, a surcharge of 10% is imposed subject to a maximum of €63,485.
Preliminary tax due for the tax year 2023 must be paid by 31 October 2023 if interest charges of .0219% per day are to be avoided. The tax paid must represent 90% of the individual’s actual liability for 2023 or 100% of the final liability for 2022 (excluding EII relief).
Alternatively, for the tax year 2022, a taxpayer can elect to make a preliminary tax payment equal to 105% of the ultimate liability for 2020 (the pre-preceding year), provided a liability arose inthat year. This option is only available to taxpayers that pay by direct debit in equal monthly instalments. The final instalment
is payable in December 2024. Where a taxpayer is paying by direct debit for the first time, payment can be made by way of a minimum of three equal instalments and, during the following year, by way of eight equal instalments.
Where a repayment is made due to a Revenue error in applying the legislation, interest will be repaid from the date the tax was paid to the date of repayment; otherwise no repayment is due.
Refunds of overpayments of preliminary tax carry interest of 0.011% per day.

Penalties
Penalties will apply to any late returns filed late.

 

Joint Assessment

Revenue may recover tax not paid within 28 days from the spouse who was not assessed. This is limited to the amount of unpaid tax referable to that spouse’s income.

Pay and File Summary

The following is a summary of pay and file dates for the year
2023
File tax return for 2022……………………….. 31 October 2023
Pay balance of tax for 2022…………………. 31 October 2023
Online Pay & File date for 2022 Tax Return……….12 November 2023 TBC
Pay preliminary tax for 2023………………..31 October 2022
Online Pay & File date for 2023 Preliminary Tax….12 November 2023 TBC
Pay Capital Gains Tax
-1 December to 31 December 2022…. 31 January 2023
-1 January to 30 November 2023….. 15 December 2023

Information included in Return

Taxpayers are required to disclose information in relation to any relief’s claimed in their annual tax return, the relief’s to be detailed are highlighted on the return forms. This will apply to individuals, both self-employed and employees and also to companies.

Failure to provide the relevant information may result in a penalty of €950, as well as a surcharge of:

  • 5% of the tax due subject to a maximum of €12,695 where the return is filed within two months of the filing deadline
  • 10% of the tax due subject to a maximum of €63,458 – where return is filed more than two months after the filing deadline.

Mandatory Reporting

Certain transactions which have the main benefit of obtaining a tax advantage are reportable to Revenue.