TAX CHANGES

The Revenue Commissioners have introduced new rules for businesses who can’t pay their tax bills in full, according to The Sunday Business Post, which says the revised code of practice will come into force from Friday.

The revisions will formalise a practice for taxpayers to pay in instalments if they cannot afford to pay in full. The new code will also introduce guidelines for dealing with taxpayers who claim they are unable to pay all or part of the settlement.

To accept a plea of inability to pay, a company or individual will require a signed statement of affairs for the last day of the month before the audit notice. It will also request a list of all assets held and the reason for non-disposal, in addition to an explanation of why it wasn’t possible to get a loan and/or evidence that a loan application was refused.

The president of the Irish Taxation Institute, Andrew Cullen, says the new code formalises practices adopted by the Revenue in the face of the difficulties caused by the economic downturn.

“In fairness the Revenue did take a pragmatic approach. It recognises that, if taxpayers need time to make a settlement, they will sit down and work out a repayment schedule. The outstanding amount will still carry interest, but that flexibility is now enshrined in the code.”

The code has also eased penalties on those who make errors in their tax returns that did not result in any loss to the exchequer. The new provisions allow for a flat payment rather than the interest and penalties a company or individual could previously expect