Fears change to tax deadline will hit compliance levels
THERE is a huge risk that fewer farmers and self-employed people will pay their tax if proposals to move the pay-and-file deadline to June are implemented, the Department of Finance has been told.
The department wants to bring the pay-and-file date forward so that officials have all the information needed to finalise the earlier Budget.
Budgets are now in October instead of December, under new EU rules.
Because of this, the department has proposed moving the pay-and-file deadline to either the end of June or mid-September.
Such a move would be hugely detrimental and put at risk tax compliance levels, a large number of organisations have told the department after it sought submissions on the issue.
The Irish Farmers Association said moving the filing date would put the viability of family farms at risk.
It added: "Changes to the pay-and-file dates for tax returns would undermine the tax compliance ability of Irish farmers, disrupt agricultural production at farm level, and ultimately the viability and sustainability of the family farm," the IFA said.
Some 600,000 people file tax returns either by the end of October, or by today if they file online.
Business lobby group Chambers Ireland questioned the need to change tax dates.
It said the proposals were unfair and not needed.
"Changing the pay-and-file system could risk the reliability of the current system and the high compliance levels that Ireland has worked so hard to achieve in the past 10 years," it said in its submission.
The Irish Tax Institute said moving the dates would lead to increased inaccuracies in tax returns. This was because tax practitioners would be under too much pressure to be able to help the self-employed file in June or in September.
It also pointed out that only 3.9pc of overall tax yield comes from the self-assessed taxpayers, so predicting the volume of this tax would not be a major issue in the Budgetary calculations.
Tax lawyer Suzanne Kelly, who has practicised for 35 years, said the self-employed were already discriminated against by having to pay tax at a marginal rate of 55pc, whereas corporations pay a 12.5pc tax rate.
She said the self-employed were not appreciated and small firms were not nurtured, unlike in other countries.
Self-employed people were also denied a PAYE tax credit, unlike employees.
"Any proposed amendment should be deferred until at least next year to allow for genuine and appropriate consultation with the stakeholders, namely the business people and the practitioners who too will have to invest in new software and reorganise yearly staff rotas," she said.