Form 11 2018 income tax returns: payment requests and acknowledgements

Sep 30, 2019


Requests from Revenue for income tax payments for cases where the Form 11 2018 income tax return has been filed in advance of the due date and either; the relevant tax payments have been made or the appropriate payment instruction submitted, has provoked several members to contact us.  Revenue tell us that they are not aware of any error in their systems whereby requests for payments of income tax is issuing incorrectly. 

You are reminded that correspondence can issue as automatic “Acknowledgement” via ROS and “Letter of Acknowledgement” to taxpayers.  Such correspondence from Revenue may not consider all tax payments made or the payment instruction submitted. 

Also, it is important to note that if preliminary tax for 2018 was insufficient, the date for payment of the tax automatically reverts to the date the preliminary tax was due, even where there is early filing of the return. In these cases, requests for payment of the tax will automatically issue from Revenue

 

Payments

You are reminded that the ROS system automatically issues “Acknowledgements” when the Form 11 is filed.  For the 2018 Form 11, these acknowledgements should show the preliminary tax paid for 2018 and balance of tax due for 2018.  Even if the balance of tax is instructed to be paid from the taxpayers’ bank account on the same day as the return is filed or instructed to be paid later, the ROS acknowledgement will show the balance of tax. Similarly, Letters of Acknowledgement that issue from Revenue to taxpayers may show the balance of tax due, these letters often will not reflect payments or payment instructions submitted as the letter is produced more quickly.  According to Revenue, when payment instructions are processed the balances are updated and receipts are issued.

 Revenue tell us to be aware of the short delay in batch processing during the peak period, and that the balance due on record can be viewed in ROS on the Revenue Record screen.

If paying by Debit Card, Credit Card or Online Banking, please note that banks may have monetary thresholds and daily limits, and transactions may be rejected. Debit and Credit card transactions are processed immediately (which may not be the ROS extended payment date – 12 November for 2018 Form 11 income tax returns).

 

Preliminary tax

Revenue’s note on preliminary tax is reproduced here (edited for current year filing dates) for your reference:

Preliminary Tax is an estimate of the Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) that the taxpayer expect to pay for a tax year.  The amount must be paid by 31 October of the tax year in question.  The amount of preliminary tax paid for a year must be equal to, or more than, the lowest of the following:

  • 90% of the tax due for that tax year; or

  • 100% of the tax due for the immediately preceding tax year; or

  • 105% of the pre-preceding year.

When any of the above do not occur, the date for payment of the tax automatically reverts to the date the Preliminary Tax was due, even where there is early filing of the return.  This leads to a request for payment from the Collector-General, which if not actioned by the taxpayer can lead to enforcement.

By way of example a taxpayer provides a NIL declaration in respect of Preliminary Tax for 2018 .  On subsequently filing the return, a tax liability arises.  Under the Preliminary Tax rules, the taxpayer had the option of paying one of the following three amounts by 31/10/2018:

(i) i.e. 90% of the tax due for 2018 or

(ii) 100% of preceding year (2017)  tax liability; or

(iii) 105% of pre-preceding year (2016) .

Where the taxpayer  has  paid  any of the three amounts above the balance of the tax would will become due on 31/10/2019 (or 12/11/2019 if filed/paid electronically).

Where the  taxpayer  does not satisfy any of these requirements, the due date for payment of  the  full Income Tax liability for 2018 reverts to  31/10/2018.

Further information from Revenue on preliminary tax is available in their Tax and Duty manual, insufficient preliminary tax is covered at 3.4.