Neglected to file FORM11 for 2006

T

TaxQ

Guest
Hi,

I worked part of the year 2006 as a proprietry director of an umbrella company set up by a crowd who look after contractors working in other companies. These guys were responsible for paying me a wage and subtracting my PAYE/PRSI contributions accordingly etc.

It has come to my attention that no FORM11 tax return was made for that period. Im not sure who is at fault here, as I left the country before the file date and am only recently back.

I stopped contracting for the company i was in and went on to work for them as permanent FT staff. I have all my payslips from the umbrella company (which detail PAYE/PRSI contributions for the period) and the subsequent P60 for the year 2006 where I worked as a normal PAYE worker.

*edit* Would this be more suited to personal taxation in askaboutmoney.com?
The P60 details ALL tax paid from both.

Anyone any advice on what I should do? Im assuming this is a serious matter. I downloaded the FORM11 and it looks a complicated beast. Should I attempt to complete it myself? Go back to the crowd who were looking after this? Call revenue? Can anyone suggest what kind of penalty I might be facing for failing to return?

Thanks in advance for any help.

 
You say that they were responsible for PAYE/PRSI. Unfortunately however as you have personal responsibility for filing an Income Tax Return for each year in which you acted as a proprietory director. PAYE/PRSI and Income Tax are separate sections. If the company you engaged had also undertaken in letter of engagement to prepare and file your Income Tax Returns in addition to handling the PAYE/PRSI then you may have some recourse if they have professional indemnity insurance. However you are primarily responsible for your Income Tax Return. Even though all taxes may have been paid through PAYE you still have that responsibility. You do now need to file that F11 as a matter of urgency. The problem now is that Revenue will levy a surcharge for late submission and possible interest and penalties. If all income is under PAYE then the fForm 11 is not overly troublesome, however If you are uncertain as to how to proceed you should consult appropriately qualified advice.
 
Under TCA97 s951-10% surcharge applies to the full tax payable for the year including paye deducted- The surcharge on the paye deducted is the killer for me. The revenue would have got all the tax on p35 i assume but just for example say p60 shows €5k tax deducted liable to surcharge of 10% = €500 just because paper form not filed( their should be a bit of common sense) File return and them appeal assessment on the grounds of under paye and did not knew you had to file personal form 11.
 
papervalue said:
File return and them appeal assessment on the grounds of under paye and did not knew you had to file personal form 11.
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Any such appeal should surely fail or S.951 would have no effect whatsoever. Every prop dir in the country could make such claims if late filing as most them on PAYE.
 
However the revenuue commissioners are not monsters. File ASAP and don't be surprised if you are NOT hammered with interest, penalties, surcharges etc. etc. etc.
 
The rules surrounding late or non-filing of tax returns are much more stringent for proprietary directors than for others. Unless you know what you are doing, you would in my opinion be unwise to attempt completing the return yourself. You should probably ask friends or family to recommend an accountant or tax advisor to assist you.

And contrary to Graham's advice, I fail to see how the people behind the umbrella company could be liable for failure to file your Income Tax Return, unless you had specifically instructed them accordingly, and provided them with all relevant personal information to enable them to do so.
 
Graham_07 said:
Any such appeal should surely fail or S.951 would have no effect whatsoever. Every prop dir in the country could make such claims if late filing as most them on PAYE.
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It all depends on who you appeal to and who's desk it lands on- If is very straight forward and based just on a P60 and the person's company is up to date and in order an revenue person might show a bit of common sense. it is based on a case per case basis.
 
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ubiquitous said:
And contrary to Graham's advice, I fail to see how the people behind the umbrella company could be liable for failure to file your Income Tax Return, unless you had specifically instructed them accordingly, and provided them with all relevant personal information to enable them to do so.
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Graham_07 said:
If the company you engaged had also undertaken in letter of engagement to prepare and file your Income Tax Returns in addition to handling the PAYE/PRSI then you may have some recourse if they have professional indemnity insurance. However you are primarily responsible for your Income Tax Return.
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I thought I had indicated that in my post. :confused:
 
papervalue said:
It all depends on who you appeal to and who's desk it lands on- If is very straight forward and based just on a P60 and the person's company is up to date and in order an revenue person might show a bit of common sense. it is based on a case per case basis.
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Yes it is seemingly straight forward but if the desk it lands on is one prone to following the strict letter of the legislation then it could prove costly for those directors who do not comply. It all comes back to the issue , as Ubiquitous said of the mores stringent rules for proprietory directors and, the fact that there are many people still becoming proprietory directors without proper knowledge of or tuition in their filing responsibilities.
 
Graham_07 said:
I thought I had indicated that in my post. :confused:
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Not that I can see. The standard engagement letters produced by ICAI includes the following clause.

We have agreed, as your agents, to prepare in respect of each accounting period an income tax return, adjusted in accordance with the provisions of the Taxes Acts.
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I would be amazed if this sort of clause means that the firm is liable for non-filing where the client does not provide them with (i) the information necessary for them to compile a return; (ii) specific instruction to file a return as prepared, normally in the form of a signature to approve the contents of the return.
 
Graham_07 said:
Yes it is seemingly straight forward but if the desk it lands on is one prone to following the strict letter of the legislation then it could prove costly for those directors who do not comply. It all comes back to the issue , as Ubiquitous said of the mores stringent rules for proprietory directors and, the fact that there are many people still becoming proprietory directors without proper knowledge of or tuition in their filing responsibilities.
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.

It is hit and miss of who's desk it lands on. He should take it as he will have to pay surcharge- If he doesn't it is a bonus. I would rather see a simple fine for these people with a basic p60 them the surcharge been applied to tax deducted.

if you had 2 p60's 30k tax with 3k surcharge and 1k tax with 100 euro surcharge, same offence but been penalised for earning more.

Maybe change law and tick a box on p35 if director only source of income- exempt them from filing return.



The filing of return is ultimately down to individual.
 
I would suggest file asap and hope for the best. You may not be charged any surcharge. Also be aware that your 2007 tax return is now due even if you have no income in Ireland as if you left the country for all of that year you should have deregistered. To be honest depending on your personal situation you may even be due money back eg. medical expenses, service charges etc. The onus is always on the director to ensure he has filed his tax returns. I'm sure you will find a clause in the agreement saying the same. Best of luck
 
papervalue said:
Under TCA97 s951-10% surcharge applies to the full tax payable for the year including paye deducted- The surcharge on the paye deducted is the killer for me.
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This is at odds with section 1084 (2)(b) which states that the amount of tax on which the surcharge is levied is reduced by tax which has been deducted (and not repaid).
 
Nige said:
This is at odds with section 1084 (2)(b) which states that the amount of tax on which the surcharge is levied is reduced by tax which has been deducted (and not repaid).
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This particular section does not apply to company directors.
 
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