Surcharge for late submission of Returns
Section 1084 TCA 1997 imposes a surcharge on any taxpayer, individual or corporate, for the late filing of a tax return.
If a return is not submitted by the specified date, a surcharge on the liability arising for the year (after credit for PAYE already paid, but before credit for tax paid directly) is applied regardless of the fact that the tax may have been paid in full and on time.
Where a taxpayer deliberately or carelessly delivers an incorrect return on or before the specified return date, the taxpayer will be deemed to have failed to deliver the return on time, unless the error in the return is corrected before the specified return date.
In that regard, however, with effect from the date of passing of the Finance Act 2014 (23 December 2014), a taxpayer will not be liable to a surcharge where a penalty is applied under section 1077E for the deliberate or careless making of an incorrect return, provided the return was made in a timely manner in the first instance.
In the case of a new business, the surcharge provisions of this section only apply to delays in filing from the second filing date of the business. However, this does not apply to new businesses where the promoter or owner has an existing business, or where that person’s spouse or civil partner has an existing business in respect of which both spouses and civil partners are jointly assessed to tax.
Calculation of the Surcharge
The surcharge is based on a percentage increase in the total tax payable for the year for which the return is late, with the percentage amount determined by reference to the length of the delay in filing. The amount of the surcharge is also subject to an overall cap.
The surcharge is calculated as follows:
- 5% of the tax liability for the year of assessment to which the tax return relates, subject to a maximum of €12,695, where the tax return is delivered within two months of the filing date e.g., for the year of assessment 2014, any date between 1 November 2015 and 31 December 2015 inclusive.
- 10% of the tax liability for the year of assessment to which the tax return relates, subject to a maximum of €63,485, where the tax return is not delivered within two months of the filing date.
Capital Gains Tax
The Return filing date for CGT is the same as for income tax, 31 October. The due date for filing a return of capital gains realised in a tax year is the 31 October following the year of assessment in which the disposal of the asset occurs. The Form 11 contains a section on which chargeable gains can be returned by the taxpayer.