3 reasons to file your income tax return on time

With the 31 October income tax filing deadline looming for sole-traders and owner-directors (amongst others) here are 3 compelling reasons to file your return on time.

1. Save money

Late tax returns attract a surcharge of 5% on the final tax liability (if filed within 2 months after the filing deadline has passed, and increasing to 10% after 2 months) .  It’s important to note that the surcharge is on the tax liability NOT the amount outstanding.  So even if you’ve paid your preliminary tax you may still have a surcharge.

That’s perhaps not much of a deterrent if you have no tax liability, but…

…if Revenue decides to take you to court for not filing tax returns you could be fined €3,000.

2. Reduce audit selection risk

Revenue selects businesses for audit using a risk based system – the majority of cases are selected this way.  Non-compliance with filing obligations will increase your risk profile, consequently increasing the likelihood of being selected for audit.

The thinking behind this is if you can’t get the simple things right, like getting your return in on time (after all you do have 10 months to do it!) then what else is wrong with your tax compliance.

3. Peace of mind

From time to time people come to me that are late with filing tax returns, for one reason or another.  Most of them are extremely worried about their tax position.  They are not only worried about what will happen if they don’t regularise their affairs, but also many have no idea of their potential liabilities which causes even more anxiety.

Most of these people are pleasantly surprised about how easy it is to get their tax affairs in order once they have the right professional expertise on board.

Quantifying the tax liability means you can then concentrate on how to pay it.

If you are late with tax returns, or are putting this year’s return on the long finger and risking late filing, engage a good accountant to look after it for you.  You may say

I can’t afford an accountant, yet

But, really,

Can you afford not to?

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