Qualifying Disclosure

[Maria12]

Hi,

I am doing a voluntary disclosure in respect of rental income and declaring income for 03/04. With regard to the interest that will be payable on the tax liability, I presume it is applied from the date the preliminary tax was due? So say for 2003, interest would be payable from 31 October 2003 and not from the date the Return should have been filed, 31 October 2004?

Also just another question - the notice from Revenue said it is not an enquiry for the purposes of a qualifying disclosure, does that mean it can still be an unprompted qualifying disclosure?

Thanks a lot

 

[Daenis]

The interest will apply from 31 October 2004 as preliminary tax is based on the previous years liability, i.e. preliminary tax payable at 31 October 2003 is based on the liability for 2002. If 2003 was the first year for rental income and there was no self assessed income in 2002 then the preliminary tax is nil because there was no liability in 2002.

Are you sure that this situation is not recitifiable by simply filing a 2003 and 2004 tax return now, getting the assessments and paying whatever is due?

 

[Maria12]

But is the prelim tax not based on 100% of prior year liability or 90% of current year liability and therefore interest payable from 1 Oct 03?

I received notice from Revenue enquiring about properties and assumed qual disclosure was the only option since never filed returns

Thanks

 

[McGrath]

Not sure if it makes a difference either way.

If you make a qualifying disclosure, then the penalty is likely to be 10% (unprompted disclosure in the "deliberate default" category)

If you file your returns now, they'll be late and a 10% surcharge will apply to the tax due.

So, either way, it's tax due + 10% + interest.

One thing to bear in mind is that in order to qualify, this disclosure must cover all tax underpayments you may have had that would be considered "deliberate default"