Monday 5 December 2016

Lenihan in U-turn on early tax filing for self-employed

Charlie Weston Personal Finance Editor

Published 27/01/2011 | 05:00

THE Government has done a U-turn on plans to force the self-employed to pay tax and file a return a month early this year.

  • Go To

Finance Minister Brian Lenihan said the deadlines would revert to their original dates.

More than 600,000 self-employed people would have had to pay tax a month earlier than usual this year under the terms of the Finance Bill published last Friday.

That was because it had been planned to bring the deadline for those who make a tax return forward to September 30.

The change was due to affect the self-employed and PAYE workers who have non-taxed income such as rent.

Mr Lenihan had originally planned to amend the self-assessment rules to bring forward the date for the payment of preliminary tax from October 31.

But yesterday, under pressure from Independent TDs, he relented.

The Irish Taxation Institute welcomed the Government's pledge to restore the tax pay and file deadline to October 31, and to mid-November for those filing online.

Institute president Andrew Cullen said the original proposal to bring forward this deadline would have placed huge cash-flow pressure on businesses.

The institute had sought an amendment on the matter and said that the move would be of enormous relief to those who would have been unable to cope with the earlier deadline.

"The original earlier deadline would also have placed immense pressure on the tax profession and the tax administration system and from that perspective it is also to be welcomed," Mr Cullen said.

Farmers were set to be put under huge pressure from the change, as they only get the first portion of their single farm payment in October each year.

The Irish Farmers' Association has lobbied hard for the measure to be reversed.

Meanwhile, tax experts have condemned another change to the Finance Act that impacts heavily on the self-employed.

The move to introduce a new 10pc rate on the universal social charge (USC) will leave the self-employed at a disadvantage, according to director of taxation at Chartered Accountants Ireland Brian Keegan.

Estimate

He said it was important to remember that self-employed people tend to employ others.

The self-employed do not get tax credits, unlike PAYE workers. And the self-employed have to pay an estimate of their current year's income in tax, and have to pay tax in a lump sum, Mr Keegan said.

Amending the Finance Act to bring in a new USC rate of 10pc for earnings of the self-employed over €100,000 would mean their marginal rate of tax will rise to 55pc.

Irish Independent

Read More

Promoted articles

Editor's Choice

Also in Irish News