The 2021 Income Tax Deadline is 31 October

The 31 October 2021 deadline for income tax returns is fast approaching. Who should be keeping an eye on this deadline and what they should be considering?

Revenue has announced an extension to the ROS return filing and payment date to 17 November 2021. To qualify for the extension, taxpayers must both pay and file through ROS.

Those subject to filing and paying income tax are usually anyone who earns income outside the scope of PAYE income, most commonly self-employed people, proprietary directors, landlords, investors etc. However, with the dawn of the coronavirus pandemic and subsequent government initiatives to keep the economy going, there will be many in the public who are not aware they may face an income tax liability for the year 2020, whether this arose as a result of a support scheme through employers like the Temporary Wage Subsidy Scheme (TWSS) or direct support like the Pandemic Unemployment Payment (PUP).

As with other years, there are also those who may be entitled to claim reliefs and credits and should ensure their returns are filed before the deadline to guarantee receipt of these.

Who should be aware of potential liabilities

The below is a broad but not comprehensive listing of those who should be aware of the upcoming income tax deadline and who should be taking action towards filing and paying any liabilities should they not yet have done.

Welfare recipients

The TWSS and PUP were paid to individuals with no tax suffered to optimize the support at the time. However, these payments are liable to tax and your whole year position must be considered in determining if a liability arises. If you received the TWSS, you may not be aware of a liability arising or you may not even be aware that your employer availed of the TWSS scheme.

Investors

In the course of dealing with private clients, we are increasingly seeing a broader range of investments held in their portfolios, normally through a stockbroker. Individuals may now be investing in complex funds and offshore funds which come under the scope of various tax treatments. Offshore funds for example need to be reported to Revenue on acquisition and any gains or payments arising from these funds is subject to tax at 41%.

Debt warehousing

As always, those who earn income outside the scope of PAYE income, such as landlords and self-employed, should ensure their tax affairs are in order in advance of the deadline. Revenue provided a debt warehousing scheme in 2020 for 2019 income tax liabilities and preliminary tax obligations and should your income for 2021 be 25% lower than for 2019, the balance of 2020 income tax and preliminary tax in respect of 2021 can also be warehoused. The debt warehousing scheme is conditional on returns being submitted by the relevant deadlines.

Therefore, it is essential that you are aware of your tax position in a timely manner in advance of the deadline in order to avail of any potential warehousing support and ease pressure on cash flow.

Claim credits and reliefs

There are many reliefs and credits that can be claimed that taxpayers may be unaware of.

Stay and spend

Did you avail of hospitality services in Ireland between October 2020 and April 2021? The Stay and Spend Tax Credit Scheme was introduced to encourage spending once hospitality returned post the coronavirus lockdowns. The scheme allows you to claim a certain amount of tax back on accommodation, food and non-alcoholic drink bought between the above months. The maximum tax credit you can get is €125 (single assessment) or €250 (jointly-assessed).

Pension contributions

Pensions are one of the leading ways to reduce your tax liabilities. If you are contributing to an approved pension scheme, you have until 31 October or 17 November to maximise your tax-effective contribution for the 2020 tax year. This would depend on your earnings for the year and age bracket you fall into but can lead to a significantly reduced tax liability and should be examined.

Medical expenses

Any medical expenses incurred should be reviewed and if qualifying should be submitted for tax relief. Tax relief cannot be granted on medical expenditure that has been reimbursed, such as through insurance companies etc.

There is a four-year time limit on claiming tax credits and reliefs, so for example, if you incurred medical expenses or college fees from 2017, a claim for tax credits in respect of these expenses must be made by 31 December 2021.

At Mazars, we acknowledge that preparing your income tax return can be daunting for many. That is why through modern technologies, we provide a streamlined service and can prepare your income tax return with little stress to you. We achieve this by, where relevant, liaising directly with your stockbrokers, accessing your Revenue record directly and availing of our internal expertise to ensure your taxes are fully compliant and in order.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client team below:

Staff Member

Position

Email

Telephone

Alan Murray

Tax Partner

amurray@mazars.ie

01 449 6480

Siobhán O’Moore

Senior Tax Manager

somoore@mazars.ie

01 449 6418

 

September 2021

Contact