No change to either filing or payment date says Irish Tax Institute

7th November 2013

Survey results
Irish Tax Institute President Helen O’Sullivan has said that AITI Chartered Tax Advisers, who are an integral part of the tax administration system, have said that there should be ‘no change’ to either the filing date or payment date in the Pay and File regime.

“Almost 70% said that clients would not be able to provide information of appropriate quality in time to prepare a June income tax filing while two thirds of respondents said they would not be able to file the same number of income tax returns in September bearing in mind the September corporation tax filing requirement”, said the Institute President.

Serious cash flow impact if payment date is changed
“Over 90% of respondents said that taxpayers would be significantly impacted from a cash flow perspective if the tax payment was moved to June while 68% said taxpayers would be impacted if the payment date was moved to September”, she added.

No greater certainty with earlier pay and file date
Ms. O’Sullivan said bringing forward the pay and file date would not bring about any greater certainty to the Exchequer receipts. “The yield from income tax paid by the self-employed is very low, in fact it only accounted for 2.8% of the overall tax yield in 2012. This yield has not varied significantly in recent years at these low levels. Thus any margin of error that could arguably arise if the figures are not completely accurate is a minimal percentage of the Exchequer yield”, said the Institute President.

Ms. O’Sullivan said: “Coupled with this small margin of error, the Government’s forecasting record has also improved significantly over the past years, making the likelihood of error more unlikely. According to the Report of the Comptroller and Auditor General in 2012 ‘The accuracy of forecasting receipts from Income Tax, which is the highest yielding tax, has improved steadily since 2008’”.

Change of pay and file date will not lead to greater accuracy in tax predictions
The Irish Tax Institute President said: “Self-assessed taxpayers are already paying 90% of tax due for a particular year in preliminary tax before that year is complete. If this date is advanced to September or June, the argument is that this will assist the accuracy of government forecasting. But if taxpayers have to estimate and pay their tax even earlier, their estimate of the tax will be less accurate”.

Risk to the efficiency of the current pay and file system
Helen O’Sullivan said changing the pay and file system could risk the reliability of the system and the high compliance levels that Ireland has worked so very hard to achieve in the past ten years. “Revenue has acknowledged that tax compliance rates in Ireland are excellent stating that “…already high compliance levels have improved since 2008, despite the on-going financial and cash-flow difficulties experienced by many taxpayers”.

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