INCOME TAX DOWNTURN

Accountants are reporting that fewer income tax returns are being filed this year, with many of them noticing a rise in the number of people finding it hard to pay the Revenue straight away, according to The Sunday Business Post.

One accountant, Sandra Clarke of Byrne Clarke and Connolly in Co Meath, said there had been an increase in paper-based filings this year among self-employed people. This would seem to fly in the face of the trend towards electronic filing through ROS in recent years. However, it makes sense when payment terms come into play.

“If you avail of the extended November 16 deadline for electronic filing, you have to pay immediately,” Byrne points out. “A lot of people are not in the position to make an immediate payment.”

A senior accountant at a large Dublin firm estimated income tax returns were down by around 20% in value terms this year.

“Capital Gains Tax has been wiped out completely,” he said. “This is down to two factors. In some cases, very little gains have been realised. In others, any gains have been offset by losses in other areas.”

Carlow-based accountant Richard Smyth said many clients were looking for refunds this year, as opposed to paying additional tax.

“The 2008 returns were made this time last year and there were a lot of refunds arising out of those filings,” he said. “Since preliminary returns are usually made on the basis of 100% of the previous year’s liability, it will be too high again this year. It means that last year’s refunds will be set against this year’s liabilities, which are already probably too high.”

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