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Revenue will discuss your problem -- but file a return

PEOPLE who do not have the funds to pay their tax by the deadline of the end of this month have been advised to get in contact with the Revenue.

They may be able to make arrangements to pay by instalments, the Revenue Commissioners said yesterday.

The self-employed, companies, and ordinary taxpayers with non-PAYE (pay as you earn) income have to file a return and pay tax by the last day of this month.

If they opt to file online they have until November 16.

The deadlines apply for PAYE workers who have rental income; those with investment income such as dividends or deposit interest that has not been paid by the bank; foreign income; profits from the exercise of share options; and income from maintenance payments from a separated spouse.

Those filing a tax return are required to pay all of the tax due from last year and preliminary payment of the income tax for this year.

Some 530,000 tax returns were made to Revenue last year, according to the Irish Taxation Institute.

Tax practitioner Cathal Maxwell of Paylesstax.ie said a number of self-employed people who file tax returns were struggling this year, and would be unable to put the funds together to pay up.

In the past, many owners of small firms and the self-employed may have borrowed money to pay the tax, but this option was now closed off.

A spokesman for Revenue said yesterday that those due to make a return had two requirements -- pay and file a return.

"Irrespective of difficulties paying the tax it is important to file a return on time," the spokesman added.

He said a surcharge of up to 10pc can be charged on late returns, while those failing to file a return could also face prosecution.

Taxpayers struggling to get cash together to meet their tax commitments should prioritise the payment due for 2009 over the preliminary amount to be paid for tax year 2010, the Revenue spokesman said.

Anyone facing difficulties paying their tax should file a return and then approach the Revenue directly to discuss their options. They may be able to agree a deal to pay by instalments. However, this is not always possible and the Revenue said that if this concession was granted it must be fully justified.

In an recent article for the Irish Tax Review, Collector General Gerry Harrahill said the Revenue was sympathetic to occasional cash flow difficulties caused by exceptional events.

''But it cannot, and will not, accept an ongoing failure to meet tax commitments, and allow a business to continue to trade and accumulate further debts," he said.

''Businesses or taxpayers who do not pay their taxes as they fall due, or pay them late, are in effect using the Revenue as an unauthorised source of credit," he wrote.

He stressed the need for ''meaningful engagement'' when taxpayers found themselves in financial difficulty.

Irish Independent