Follow these tips and you’ll be in a better position to hit the ground running when it comes to your tax affairs.
1: At the start of the year, review your taxes due. Your business could be eligible to file returns and make payments less regularly or using direct debit.
2: File your returns on time to avoid interest. Remember, Revenue’s interest rate is calculated on a daily basis, so missing the deadline can be costly.
3: Learn more about the VAT “cash-receipts” basis. This helps you avoid the cashflow difficulty of accounting for VAT on a supply when the invoice has not been paid by a customer. More information on the cash receipts basis and how to opt in is available from the Revenue website.
4: Consider whether you can make a claim for bad debt relief. Where bad debts arise and VAT has been accounted for on the supply, there may be scope for a VAT bad-debt relief claim.
5: Where at least 75% of your turnover is sales to customers outside of Ireland, it may be possible to register with Revenue to receive all supplies without VAT. Applications for authorisation should be made on Form VAT 56A, which is available from the Revenue District responsible for your tax affairs or may be downloaded from the Revenue website under “VAT Forms”.
6: Ensure that enough of your preliminary tax is paid in order to avoid possible interest charges.
7: Consider if any tax reliefs may be claimed and employ a qualified tax adviser to help you prepare the submissions and formal claim applications.
8: Use ROS to file and pay your taxes. This online system is obligatory for many businesses.
Tax arrears and the powers of Revenue
The Revenue pursues tax debts in a timely manner. If a tax liability runs into arrears and Revenue has not recovered the tax by following the normal process, it has the following powers:
- It can refer the debt collection to the Revenue Sheriff, who can seize assets of the business and sell them to pay tax debts.
- It can issue a “power of attachment order” to a debtor who owes the taxpayer money, requiring the money to be paid directly to Revenue.
- A court judgment against the taxpayer can be sought, which can result in the forced sale of assets, an instalment order or a bankruptcy petition.