Failure to File Income Tax Return for 2014

TheChizler

Hi all, just looking for the direction I should head in.

Arrived back home at the parents today to find a letter from revenue from the 4th of this month. Opened it and it was a warning regarding the failure to file a form 11 income tax return for 2014.

From 2013 to late 2014 I was one of two directors of a limited company, owning one share out of two. This was something I had taken on as a favour to my brother, as he wasn't 18 yet and couldn't form a company himself. I was fairly involved as I was aware of my responsibilities (as company secretary also) so got a company accountant to deal with the things I didn't have the knowledge to deal with. I put a bit of money into starting up myself which I never fully expected to get back. There was no intention of taking directors wages or any sort of wages either. I had a regular PAYE job elsewhere and my tax from this was dealt with by the company.

As it turned out we made no money, and a few months after my brother turned 18 and was registered as a director I resigned from my position some time in September 14. I, naively it turned out, presumed the accountant would deal with my 2014 tax return as he had done the previous year, since he was still signed on to represent me to revenue. The only thing I did myself was return some statement of liabilities (€0) on a form revenue sent out. I got a letter in 2015 from Revenue letting me know that the accountant had stopped representing me, which I was fine with as I thought that whole thing was done and dusted. I returned the same form in 2015, wasn't sure whey they still sent it.

So fast forward to today and this warning. The warning says I can return my return now and may avoid all the bad things listed below. So my plan is to ring Revenue in the morning and figure out do I have to return the 36 page income tax form when I had zero income from that position, or will answering the questionnaire on the back suffice? I know that directors with more than 15% of the shares of a company have to so I would have qualified then, so I fear I may have to. I won't be going back to that accountant as I want to avoid bringing up anything from that period in my life if I can help it.

So, what's the likely outcome? I had a look at form 11 and the thought of going back to get all my tax details for that year is daunting. I know I've been incredibly naive here, I suppose I thought that they wouldn't care when I had stated I had 0 income from it before. Think I may have underestimated revenue.

howardmarks

TheChizler wrote: »

Hi all, just looking for the direction I should head in.

Arrived back home at the parents today to find a letter from revenue from the 4th of this month. Opened it and it was a warning regarding the failure to file a form 11 income tax return for 2014.

From 2013 to late 2014 I was one of two directors of a limited company, owning one share out of two. This was something I had taken on as a favour to my brother, as he wasn't 18 yet and couldn't form a company himself. I was fairly involved as I was aware of my responsibilities (as company secretary also) so got a company accountant to deal with the things I didn't have the knowledge to deal with. I put a bit of money into starting up myself which I never fully expected to get back. There was no intention of taking directors wages or any sort of wages either. I had a regular PAYE job elsewhere and my tax from this was dealt with by the company.

As it turned out we made no money, and a few months after my brother turned 18 and was registered as a director I resigned from my position some time in September 14. I, naively it turned out, presumed the accountant would deal with my 2014 tax return as he had done the previous year, since he was still signed on to represent me to revenue. The only thing I did myself was return some statement of liabilities (€0) on a form revenue sent out. I got a letter in 2015 from Revenue letting me know that the accountant had stopped representing me, which I was fine with as I thought that whole thing was done and dusted. I returned the same form in 2015, wasn't sure whey they still sent it.

So fast forward to today and this warning. The warning says I can return my return now and may avoid all the bad things listed below. So my plan is to ring Revenue in the morning and figure out do I have to return the 36 page income tax form when I had zero income from that position, or will answering the questionnaire on the back suffice? I know that directors with more than 15% of the shares of a company have to so I would have qualified then, so I fear I may have to. I won't be going back to that accountant as I want to avoid bringing up anything from that period in my life if I can help it.

So, what's the likely outcome? I had a look at form 11 and the thought of going back to get all my tax details for that year is daunting. I know I've been incredibly naive here, I suppose I thought that they wouldn't care when I had stated I had 0 income from it before. Think I may have underestimated revenue.

You have to complete the form. Give them a call anyway and let them know the situation and that your in the process of completing it. Also if your no longer a director you should deregister for income tax as the obligation remains each year til u do so.
It may be a 36 page form but it doesn't mean it's all relevant to your situation. You only complete what applies to you directly

TheChizler

Thank you! I suppose a bit of paper and ink is a small price to pay to get out of Revenue's spotlight. I'll give them a ring to let them know the situation all right. I'm just a bit startled by this, I thought I was done with it all! I'll ask them as well how to deregister for income tax.

Do you think it's likely the same thing will happen for 2015? Hopefully I'm still within the deadline for doing it via ROS.

TheChizler

Out of interest would it normally be possible to claim back some losses against tax paid on other sources of income? E.g. loss of directors loans of a few thousand Euro. I know it's the kind of thing I should get a professional for, and a lot of it was paid directly from my personal account to services as it took us a while to get a business account set up, so the path the money took was quite messy, and technically the company still exists on paper. I don't think it would be easy and I had written it off in my mind as paying for experience, so if it was going to be too complicated I'd probably just leave it.

schmooschmoo

I also unexpectedly got the same letter. I formally ceased a partnership in 2013 and filed taxes for that year thinking that was everything necessary completed but now I've received a letter saying I didn't file taxes for 2014.

I was naive to partnership registration and tax returns when I started so when I filed my own Form1 for the first time I was surprised I'd to fill in a Form 11 also but happily obliged, doing both each year until I filed a Form1 and Form11 for 2013. I sent in the necessary cessation form for the partnership to the CRO and confirmed that it was listed as having ceased trading.

I didn't get any warning for not filing Form1 in 2014, which leads me to wonder if I've misunderstood how self-employment under Form11 works? Have I missed something about winding down trading under my own name as well as the Partnership and this is why I have this warning? As I mentioned, I only filled in Form11 as a required obligation for filing Form1 and never started trading separately under my own name. If I didn't start, I didn't believe I had to end - if that makes sense?

TheChizler

I'm thoroughly confused by the whole matter! Going to have to sit down this evening a fill out Form 11 anyway.

I rang Revenue and was advised to fill out form TRCN1, which is for de-registering you for income tax form the date you ceased being liable. I sent that in straight away. Maybe you need that?

jjjd

TheChizler wrote: »

I'm thoroughly confused by the whole matter! Going to have to sit down this evening a fill out Form 11 anyway.

I rang Revenue and was advised to fill out form TRCN1, which is for de-registering you for income tax form the date you ceased being liable. I sent that in straight away. Maybe you need that?

Don't forget your CRO responsibilities as a director of a company to submit annual returns to the Companies Registration Office, or else you may have to pay late filing fees, etc. Get in contact with them and have the company struck off/wound up.

TheChizler

jjjd wrote: »

Don't forget your CRO responsibilities as a director of a company to submit annual returns to the Companies Registration Office, or else you may have to pay late filing fees, etc. Get in contact with them and have the company struck off/wound up.

Don't worry we were aware of that at the time and I took care of it while I was involved, the current directors are dealing that now (I hope), but I haven't been a director since 2014 so at least that's not my concern any more!

schmooschmoo

TheChizler wrote: »

I'm thoroughly confused by the whole matter! Going to have to sit down this evening a fill out Form 11 anyway.

I rang Revenue and was advised to fill out form TRCN1, which is for de-registering you for income tax form the date you ceased being liable. I sent that in straight away. Maybe you need that?

I Googled it and it looks pretty relevant to my situation. I'll ring them and find out, thanks for the pointer.

barneystinson

schmooschmoo wrote: »

I Googled it and it looks pretty relevant to my situation. I'll ring them and find out, thanks for the pointer.

Form 1 is a form that a partnership is obliged to submit.

Think about what's on a Form 1, how could that possibly establish the correct tax liability of the partners, if they have other income, or are jointly assessed with a spouse etc... all it does is record the trading activity of the partnership and how the income is divided between the partners.

The individual partners in a partnership are all then individually obliged to file their own personal income tax returns.

The partnership has its own tax registration, so ceasing that ceases the partnership but unless/until the individual partners cease their own income tax registration Revenue will continue to expect/demand Form 11...

schmooschmoo

Think about what's on a Form 1, how could that possibly establish the correct tax liability of the partners, if they...

Yes, this makes sense. But more so if you're familiar with the territory. In any area of expertise it can be easy to slip away from putting yourself in the position of somebody naive to the area.

From my perspective, I was trading as a partnership. I had to formally declare this (through the CRO and then Revenue). This made sense. I had no intention of trading as 'me'. The partnership and 'me' felt distinct. Everything the partnership earned was declared in the partnership accounts and Form1 at an even split. There was a space to say if it wasn't an even split. The form encompassed everything that I had to declare.

...if they have other income, or are jointly assessed with a spouse...

If I had other income, etc. I would have been looking for whether I had other forms to fill and where to mention this on Form1. That made sense. Because I didn't, the obligation to fill in a Form11 came as a surprise to me at the time. But I understand it's a (wide) hoop that everyone can fit through, rather than all partners being able to tick on Form1 that they've no other form of income/partner has income and to fill in the relevant other forms if they do.

all it does is record the trading activity of the partnership and how the income is divided between the partners.

All of our activity was trading as a partnership and dividing the income evenly. Again, I now see where Revenue is coming from on this but I hope it's possible to see my thoughts when I started out. In any case, all Form11 were filled in for all partners each year.

The partnership has its own tax registration, so ceasing that ceases the partnership but unless/until the individual partners cease their own income tax registration Revenue will continue to expect/demand Form 11...

This must be the case for me then. I'll seek advice from them on what combination of forms they need filled in. From my perspective, I had registered a partnership trade in the CRO and sent in two forms for that trading year to Revenue that mentioned the income was all from the partnership. I then sent a partnership cessation notice to the CRO and my last two returns to Revenue both had a cessation of trade date on them.

As my Form11 stated that the partnership was my only source of income and that it ceased trading on a certain date I didn't logically think I had to notify them along this in a different form, which feels like repetition.

Thanks for the input.

TheChizler

In the middle of completing the form and at the self assessment section; it looks like I overpaid PAYE income tax for the year, I was employed by two companies with time in between and as best I can make out the second employer didn't apply unused tax credits that I had accumulated between jobs.

So for the year I'm claiming €1650 PAYE tax credit, €1650 single person's credit, and €219 flat rate expenses (€43.80 credit equivalent), so my total tax credit for the year is €3343.80? I didn't reach the upper rate threshold so I can keep it simple thankfully. There is around a €200 difference in 20% of my gross income minus the credits between what I actually paid and what I calculate I should have paid. Would it be cheeky to claim this back at this stage? When filing so late? Revenue take around 10% extra as a late filing penalty, I presume this applies to refunds as well.

The only complication that I can see is that I put a big €0 liability/refund on the pay and file reminder that I got in January 2015.

Also I cashed a couple of savings certs that year, which had DIRT paid automatically/exempt. In Form 11 there's a section for 'Special Share Account(s)/Special Term Share Account(s)/Special Savings Account' but from Googling I can't figure out if this would apply to savings certs. I think I don't reference them at all? A guide I found says only put things in here if you're looking to reclaim the DIRT, which I'm not.

TheChizler

Finally (nearly) finished filling in the damn thing last night. Took me a couple of hours to figure out that you don't fill in both the tax payable and tax overpaid fields in the self declaration :S. Thank goodness for Tipp-Ex. Since I was a director there's a 10% surcharge of tax chargeable before anything I've paid already, so €71 down the drain, but it turned out that my final employer in 2014 didn't apply unused tax credits from the previous jobs so I'm actually owed €200 overall! Only thing left to do is somehow figure out how much interest I was paid on bank deposits so I can include that (couple of €, they'll hardly care???), I didn't think I had to include it as it was already subject to DIRT. I think I don't have to include savings certificates unless I'm claiming DIRT back, which I'm not.

Just waiting for my ROS application to be processed so I can download the fillable form 11 that will confirm that I've calculated everything correctly on paper. I completely understand why people pay accountants now!

TheChizler

Just to conclude, got my refund from Revenue during the week. Was shocked to see money going in the opposite direction for once! I'm not sure do they go through all the numbers and confirm your self assessment or do they just blindly agree with you unless there's reason to investigate further, but I was fairly confident of my numbers at the time.

Thanks for the pointers.