The Revenue Commissioners want Interest on Late Payments

In the past the revenue Commissioners a.k.a. the Tax Man, was slow in seeking interest from late payers of taxes. For example, your VAT return for Jan/Feb is due for payment on the 19th March i.e. Your cheque should arrive no later than the 19th March in the Collector Generals Office in Limerick. If it does not then you are late and could be charged interest for late payment.

The Revenue Commissioners have now taken to writing to 'Slow' payers of taxes to inform them that their account is being watched and if they continue to send in payments late, the enforcement of interest on late payments will be made. And it is happening. They are demanding and getting interest from tax payers and they are showing no mercy to those they have contacted.

I have no problem with late payers being charged interest as long as it applies to everyone. From from my experience it does not. If you are one of the unfortunate to get "the letter" then they will come after you for interest. Yet there are businesses out there who continue to pay late and receive no letters or interest demands. This is unfair and goes against the policy of treating all tax payers equally.

In this day and age with all the technology advances you would think that the revenue commissioners would be able to track late payments an charge interest automatically or do they have a "PPARS" computer problem like the health boards. Lots of technology but it can't do the job.

To make things easier for themselves and tax payers (businesses who collect VAT and PAYE/PRSI contrubutions), why not make the month end the due date Ja/Feb due on Fb 28th. It is easy to monitor and you dont need any fancy software to work out when a payment is late. It is late if it is received after the month. It also gives the taxpayer some more time to prepare their VAT returns.

For those of you in business and VAT registered you know the problem. You have a month end to complete a VAT return and P30 (PAYE/PRSI) return all before the 19th of the month. Fine when you have an accounts department. But if you are a small 2 person company, time is a scarce resource. Extending pay date to the end of the month, as in the UK, would be helpful.

This new option of filing every 3 months for PAYE/PRSI sounds good on paper but you need to watch yor cashflow. If you can setup a direct debit with the Revenue Commissioners and pay your VAT installaments and PAYE/PRSI over the year and file one annual VAT return and one annual PAYE/PRSI return at the end of the Year only this is a lot easier. But don't underpay, keep monitoring what you owe or you will be in for a shock at the end of the year and you may not have cash to pay the outstanding tax.

Check out
www.revenue.ie
www.help4accounts.com
www.nilssondenver.com