Late Filing Surcharge

Dancork7

Hi All,

I was informed by revenue that I should have been filing income tax returns since 2019 due to being a Proprietary Director.

I also meet the criteria for a non-proprietary director (and the guidelines don’t actually say they are mutually exclusive) due to the director role being a wholly unpaid role and I have no non-PAYE income and I wouldn’t be chargeable were it not for the director role which is the interpretation i took and why I didn’t file anything.

My primary employment is in a multinational so PAYE Income. When I attempt to file the late filing surcharge is applied on my full PAYE liability even though there is no non-payment of tax whatsoever.

I just set up the company for a friend as they needed to be VAT registered to trade and wanted to help them avoid fines (the irony is not lost on me).

Have been engaging for weeks with revenue but little progress being made through myenquiry or over the phone

Anyone with experience re. Late filing surcharge here ?

SureYWouldntYa

If you own more than 15% of a company you're deemed a proprietary director, and have an income tax filing requirement

How have you been filing your company returns with the CRO and Revenue? If using an accountant I'm quite surprised they didn't let you know about the requirement

Dancork7

We didn’t use an accountant as company made one sale in Feb 2020 and hasn’t made another since just did the filings as needed.

No one was ever paid anything which is why per the revenue guidelines it uses unpaid directors as an example for those that don’t need to file anything hence the misinterpretation.

SureYWouldntYa

Your best bet would probably be to write to My Enquiries to make your case about not having a filing requirement, if they disagree then at least you'll get an answer as to why

ScrewedBigTime

Have you selected all of your PAYE Employee Tax Credits and Personal Tax Credits?

Worth checking this out as if you are PAYE income only as stated and you paid correct tax during the year , you should not have an additional liability and there also then would be no late filing surcharge.

timetogo1

That happened to me a few years ago. I had set up a company that never made any money. Then when I was applying for a mortgage the bank required a form from revenue. I got that, along with a fine.

I gave my reasoning on the documents part of the site, behind not filing (I never made a cent, I was ignorant and all the tax I paid was PAYE so I thought I didn't need to send in a form saying I owed €0).

They sent me a letter saying theyd waive the fine once. So I closed down the company after that.

Dancork7

Thanks all much appreciated.

Going to get everything filed seems the best course of action and go from there with them as myenquiry is just now turning into a long conversation with myself.

ThreeGreens

https://www.boards.ie/discussion/comment/119984600#Comment_119984600

Unfortunately that is not correct for proprietary directors. In this case the surcharge it before taking account of PAYE paid. It's true for everyone else.

You need to be sure that you are in fact a proprietary director. Were you in fact a director during all the relevant years or only some? Did you own 15%+ of the ordinary share capital of the company? If you were just doing it for a friend, then it seem unlikely that you'd own the share capital. If you don't own the share capital, then you were just a director but not a proprietary director.

If you are a proprietary director, for all the years, then file the Form 11. It will come out with a surcharge. Once that has issued, send in a message via "My Enquiries" and put your best case forward for why you think they should waive the surcharge in your case. If you know an accountant who works in tax, ask them to review the text of the message before sending it in. The wording can make a big difference in how your case is treated.

Dancork7

https://www.boards.ie/discussion/comment/119987106#Comment_119987106

Yes ThreeGreens you are right it’s on your full PAYE liability from all sources not the unpaid liability which is nil here.

It’s a shareholding over 15% but I appear to qualify for an exemption one year as wasn’t trading and then as I said wholly unpaid role and I have no non-PAYE income and I wouldn’t be chargeable were it not for the director role which is the interpretation I took from the guidelines and why I didn’t file anything.

Thanks for the advice, appreciated! will be sure to reach out for a professional review of my reasoning before sending to them