CGT Query

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FredBloggs

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504
In 2005 I had a small capital gain and I had the services of a well known accountancy firm who advised me on paying the CGT, what could be deducted against it etc. They even did the CGT computation and paid the money to the Revenue on line service for me. I am a PAYE worker but even so have religiously filed my tax returns each year - up to the 2004 return. I was safe (I thought) in the knowledge that my tax liabilities had been discharged and as other things were preoccuping me last autumn I never got around to filing a return. This year I'm back on track and am preparing my 2005 and 2006 returns. But when I read The Sunday Business Post Guide to CGT this morning I read with horror "If you do not file your return for a tax year by the filing date (31 October in the following tax year) - a surcharge will be added to your tax liability - even if the tax was paid on time!" It goes on to state that if you file more than 2 months after the filing date the surcharge is 10% of the net tax liabilty"

Can anyone tell me is this enforced on all CGT liabilities and is the 10% surchage the highest it gets (ie that surcharge isn't higher for a year late)

I had never heard of this surcharge and am pretty annoyed that the accountants never pointed out that I had to make return by the following 31st October or face a surcharge. Their fees were high enough for the work they did!

I'm sure this much catch a fair per centage of people who like me have an isolated Capital Gain but who normally wouldn't have to make a return as they are in the PAYE system
 
I gather that you paid the CGT preliminary tax for 2005 when due, but you never actually filed the tax return relating to that year. CGT is a self-assessed tax and the article in the SBP yesterday is one that is done every year at this time. Also, the Revenue always advertise on the radio etc in advance of the deadlines. ( they've started already ). Notwithstanding ones PAYE status, any self-assessed taxes must be filed by the 31 October ( or 15 NOvember i online filed ) deadline. PAYE taxpayers do get caught out by this sometimes. The surcharge is maxed at 10% however this isn't the only penalty Revenue have at their disposal. Non-filing of a tax return ( where one is due ) is a criminal offence. Revenue can, and often do, prosecute non-filers and you see these on the defaulters lists published several times a year. There is also interest on late-payment, however since you paid the principal liability on time that should not create too much difficulty now. One can only suggest that the overdue return for 2005 be submitted ASAP to minimise any potential further penalties.
 
10% is as bad as it gets and it is usually charged (though not always).

Get your return in now and see what happens.
 
FredBloggs said:
I had never heard of this surcharge and am pretty annoyed that the accountants never pointed out that I had to make return by the following 31st October or face a surcharge. Their fees were high enough for the work they did!
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I suspect you are jumping to conclusions. Are you 100% sure they did not file this return for you? I would be very surprised if they did. As an accountant who regularly prepares CGT computations & returns for regular & once-off clients, I would never dream of preparing a CGT computation and arranging for the client's payment without also preparing and filing the client's return either at the same time or shortly afterwards. I suspect your accountants did likewise. Check this with them and I would guess that they should be able to allay your fears.
 
Thank you for all your replies. Unfortunately Ubiquitous the accountants definitely didn't file the return. They did everything else - did the comp, even paid the tax for me on line, but never mentioned the filing part - and I've re read all their correspondence just to be sure.
I'll bang in the return now and at least I know the surcharge is capped at 10% - still bad enough but better than I feared!
 
Get them to plead with the Revenue to waive the surcharge on the basis that the important part of the work (ie the computation & payment of the liability) was done in strict accordance with the law, and that the return was obviously forgotten about inadvertently. At least, that's what I would offer to do for you, were I in their shoes.
 
ubiquitous said:
Get them to plead with the Revenue to waive the surcharge on the basis that the important part of the work (ie the computation & payment of the liability) was done in strict accordance with the law, and that the return was obviously forgotten about inadvertently. At least, that's what I would offer to do for you, were I in their shoes.
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I'll try that - nothing to loose at this stage. Thanks again
 
Or if that fails, as a last resort, trying contacting them yourself. If you are doing this, try and get some basic tips beforehand as to what, and what not, to say. PM me privately if you don't have any other source for this.
 
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