Outstanding Tax Returns

[Liamos]

A friend of mine has told me that he has not filed any tax returns since around 1996. His believes his income is quite low and rather than owe any tax, he would infact be due back tax. This is because part of his income comes from dividends which he would have received net of tax. Is it worth his while preparing and submitting ten tax returns? I thinkthe Revenue have a four year rule regarding tax repayments - but I'm not too sure.
Would be grateful for any advice.

 

[liteweight]

The Revenue can go back as far as they like but your friend can only claim a refund for four years. It's illegal not to file a tax return but if it turns out he doesn't owe anything, Revenue might turn a blind eye. On the other hand they might start to wonder what else he hasn't returned. Has to be done though.

 

[Liamos]

Thanks for that. My only other query then is, if he decides just to file the last four tax returns (to save on paperwork, accountants fees etc) to claim his refunds, will the Revenue automatically look for the six other returns as well?

Does he need to file all Returns although he is only entitled to claim a refund for the last four?

 

[ClubMan]

Is your friend PAYE? If so then his tax affairs could be more or less up to date. There is no onus on PAYE workers to file annual returns. However they are obliged to keep Revenue updated with any information relevant to keeping their tax affairs up to date. If he is self employed then different rules apply and he probably should have been filing self assessed returns over the years.

 

[liteweight]

Revenue don't automatically look for returns AFAIK...it's self assessment so there is an element of trust involved. However, all tax returns should be made. He should talk to his accountant about this...it's pretty straight forward normally so I doubt there would be extra fees involved.

 

[CCOVICH]

Is your friend PAYE? If so then his tax affairs could be more or less up to date. There is no onus on PAYE workers to file annual returns.

Is this the case where they are in receipt of dividend income (as per the original post)?

 

[ClubMan]

Sorry - missed that bit. I still don't think that there's necessarily an onus to file a full Form 12 return and such additional non PAYE income may be dealt with by just writing to Revenue with details.

 

[liteweight]

Is this the case where they are in receipt of dividend income (as per the original post)?

I assumed it was not PAYE as the OP said part of his income was in dividends. He'd also made the assumption that he didn't owe any tax because his income, in general, is low. I don't think too many PAYE workers are allowed to reach that conclusion themselves.

A PAYE worker does have to submit forms with relevant information in regard to dividend income.