The Revenue Commissioners have recently issued a Tax Briefing outlining the provisions of the new “full” self assessment regime, which was introduced in the Finance Act 2012. This new regime will apply to Income Tax and Capital Gains Tax (CGT) filings for 2013, along with Corporate Tax returns for accounting periods commencing on or after 1st January 2013 The new system requires individuals, or their agent (accountant or tax advisor), to complete a “self assessment” section when submitting a tax return.
The Revenue Commissioners will no longer raise assessments; however a provision has been made for assessments to be raised under the following circumstances:
- The customer fails to make a return
- The customer makes a return, but fails to self assess
- The Revenue Commissioners are not satisfied with the adequacy of a return.
We have reviewed the recent tax briefing issued by the Revenue Commissioners mentioned above and outline the following 4 key features of the new “full” self assessment regime.
1. Individuals and Companies must “self-assess” their liability
Under the new system, taxpayers must now complete a self-assessment section on their tax returns. This section is now included in both the Revenue Online System (ROS) and paper returns. If this section of your return is not completed, a fixed penalty of €250 will be applied by the Revenue Commissioners. If you prepare your returns through ROS, this system will continue to provide you with a calculation of the liability due and you may choose to accept this calculation by including the same figures in the self-assessment section. If you disagree with the calculation provided by ROS, you can enter your own figures however you will be required to provide an explanation of the differences in your calculation. It must be noted that if you do accept the figures provided by ROS and include these in the self-assessment section you cannot subsequently appeal the liability, as it is deemed to be your assessment and you cannot appeal your own calculations. It is therefore imperative that you include your own figures in the self assessment section if you do not agree with those provided by ROS. It is also advisable that you retain a copy of your return and the calculations from ROS, as if it were to transpire at a later date that the ROS calculations were incorrect, such copies could protect you from any interest and penalties that may arise.
2. Notices of Assessment will no longer be issued by the Revenue Commissioners
In previous years the Revenue Commissioners have issued a Notice of Assessment, following the submission of your return. This will no longer be the case and taxpayers will now only receive an acknowledgment of receipt of the return submitted, which will include a copy of the self assessment section completed by the taxpayer. This receipt will only be issued electronically by the Revenue Commissioners into the ROS inbox of the taxpayer and their agent. The Revenue Commissioners have confirmed that they have discussed this process with various government bodies such as Student Universal Support Ireland (SUSI) and the Health Service Executive (HSE), who would previously have requested a Notice of Assessment as evidence of income when individuals are applying for a third level grant, medical card, etc.
3. Expression of Doubt
While the option of including an expression of doubt has always been available on tax returns, the new facility will require significantly more details in relation to the doubt being raised. The additional information now required includes:
- Basis of the doubt
- The tax law in question
- The amount of tax in doubt
- Details of the research carried out.
In addition to the above, you will be required to submit your supporting documentation to the Revenue Commissioners through their secure email service. An expression of doubt can only be made if both the tax return and the supporting information surrounding the doubt are submitted by the relevant filing deadline.
4. Returns that are e-filed must be e-amended
If you wish to make amendments to a tax return which has been submitted electronically, such amendments will also be required to be completed online and will require a brief explanation of the amendment made. While electronic filing has decreased the time taken to complete tax returns, it does have one significant disadvantage. At present, if you have appointed a new tax advisor they will not be in a position to view or amend tax returns submitted by a previous tax advisor. This matter has been raised with the Revenue Commissioners; however requests for amendments in these cases should be made in writing to the relevant Revenue District. For many individuals the Income Tax Return deadline of 31st October is fast approaching and it is advisable that taxpayers prepare their Income Tax Return in advance of this deadline so they are aware of and can prepare for any liability that may fall due on 31st October.
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