Written Answers. - Tax Returns.
Enda Kenny
Question:
196
Mr. Kenny
asked the
Minister for Finance
if his attention has been drawn to the specific transitional problems affecting the filing of calendar year tax returns relating to the October 2002 filing deadline; his views on whether the vast majority of practitioners working between 1 March 2002 to 31 October 2002 will require a 12 month work load to be processed in an eight month period; if his attention has further been drawn to the fact that staff will have to deal with dual currency problems, straddling the changeover period accounts 1 January 2002 to 5 April 2002 together with related difficulties of the impact of the calendar year transitional rules and other matters; his views on whether the October deadline is workable; his plans to change the legislation to a 2003 date or to introduce a staggered filing system; and if he will make a statement on the matter.
[6824/02]
The Deputy's question relates to the new return filing date for income tax self-assessment cases arising from the changeover to a calendar tax year and the streamlining of the self-assessment payment and return filing system. Under the old 5 April year-end, tax returns had to be filed by the following 31 January, that is, a period of approximately ten months from the end of the tax year. This ten month filing period has not been shortened under the new arrangements: the tax year now ends on 31 December and the return for that year must be filed by the following 31 October.
The new streamlined "pay and file" arrangements, which were introduced in the Finance Act, 2001, were designed to make the self-assessment system work more effectively. Instead of three dates in the self-assessment calendar – 1 November, the preliminary tax payment date, 31 Jan uary, the return filing deadline and 30 April, the date by which any balance of tax due should be paid, from this year onwards there will be only one key date – 31 October. By this date, taxpayers will pay their preliminary tax for the current tax year, file their tax return for the previous tax year and pay any balance of tax due for that previous tax year.
I am conscious that the transition to the new filing and payment arrangements may cause some pressures in tax practitioner offices during 2002, particularly coming up to the 31 October 2002, deadline for filing tax returns for the short tax ‘year' 2001. In discussions with the tax practitioner bodies leading up to the introduction of the new pay and file arrangements, I indicated that I was not prepared to extend in legislation the return filing deadline for the first year of the new arrangements to deal with these transitional issues. However, this does not preclude the Revenue Commissioners from adopting a reasonably flexible approach, on an administrative basis, for the first year subject to the Exchequer yield being protected.
I understand that representatives of the tax practitioner bodies have already made known their concerns to the Revenue Commissioners about the 31 October 2002 filing deadline, including those referred to by the Deputy, and that these concerns are being addressed in the Tax Advisory Liaison Committee – TALC. This is a standing committee comprising senior Revenue personnel and representatives from the main tax practitioner bodies. I hope that through consultation an acceptable solution can be found for all concerned including the Exchequer.
Question No. 197 answered with Question No. 180.
