TAXATION
We have come a long way - but Revenue
would like us to travel further
BY
Kevin Elliot
We have come a long way
- but Revenue would like
us to travel further
Kevin Elliott examines the impact of the decision to bring forward
Budget Day to October.
Kevin Elliott is Head of
Tax at TKE Tax, a boutique
CPA Tax and Business
Advisory firm providing
tailored services with its
key people having over
fifty years of experience
in Revenue, practice
and industry.
[email protected]
the Minister for Finance to announce, if even
in headline form, on Budget Day have more
recently either been previously announced
or at least been very well flagged. [Of course
the anti-avoidance detail that tax experts
like to pour over tend not to be part of the
kite flying.] But the day usually still brings
occasional nuggets for curiosity value.
So what does that mean for Members of
CPA Ireland and their clients?
Beforehand
For those practitioners who have been
around long enough to witness the
enormous changes in Tax law that have
been visited upon us including:
•
•
•
•
self-assessment,
the change to current year basis of assessment,
surcharges for late filing,
changing the tax year from 5th April to the
calendar year
and having thought “are we nearly there
yet?”, you have a further distance to travel!
Yes folks, due to EU budgeting rules, the
annual Budget Day is being brought forward
from the recent vintage of early December
to October. Specifically, this year the Budget
will be presented on Tuesday 15 October.
Like any change, there has been much
public comment about it already.
Government say that they need the extra
time to get the Budget to the European
Commission for scrutiny.
Budget Day has in recent years lost a vast
element of the surprise that existed in
previous years when many people were
more concerned about the impact of the
Budget on the price of “the old reliables” of
fuel, tobacco and alcohol. Also, many changes
that in earlier years would have been left to
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If you have been working on some planning
with a client that has tax implications (and
almost everything has a tax implication now
– even if it is just using up some of the well of
tax losses) and if you have even the slightest
concern that it might be impacted by next
month’s Budget then you need to focus in on
getting it finished this year much earlier than
in prior years. Of course there is always the
possibility that the Minister will announce
some much needed relaxation of a provision
that the same client has been agonising over
and if so the good news will be along earlier
this year. Hmmmn - I wonder!
The Day itself
If you usually do a mailshot or breakfast
briefing or evening briefing for clients and
contacts in December the simple answer is to
chalk that out of the December diary and move
it to 15th or 16th October. That would be easy.
The next day
This may be the time to consider the impact
(positive or negative) of the Budget for
particular clients and start to contact them.
Tax Filing Deadlines
Ah yes, we are now into nitty gritty – so
beloved by accountants. And yes there is
a sting here. One of the key implications
consequent on bringing forward the
Budget Day is a plan to bring forward the
Income Tax filing date. Cynical readers
may also wonder whether a change to the
Corporation Tax filing date will also follow.
There has been much concern, and rightly so,
about the cash flow implications for business.
Suddenly instead of having 12 months to get
the Income Tax payment together, there will
be a shorter period. Just how much shorter
that period will be remains to be seen. If
someone has borrowed to pay the previous
year’s tax and is repaying that over eleven
months or twelve months then there will be
a few double months in the year of change.
Irish businesses are already struggling
without the need to impose a further
financial burden on them.
While there is a potentially obvious solution
that the Income Tax filing deadline could be
brought forward but the payment deadline
could remain, it would appear that is not
part of the plan. There appears to be a
view “out there” that while your return is
welcome, the Government also wants to
“see the colour of your money” before they
can make their budget for the next year.
Suggestion
Why not revert to the prior year basis of
assessment so that we have more time to
get information together? And for the year
of change (when say 2012 income will be the
basis for 2012 and 2013 assessments) have
a once off option to switch to actual 2013 or
perhaps an average of 2012 and 2013?
Impact on the work flow in CPA
Practices
A typical year’s work flow in a mixed
practice might see something along the
following lines:
• January to April – Audit “busy season”
• April to May – Start of study/exam leave
• June to August – staggered holidays (with
some study leave for exams for other bodies)
ACCOUNTANCY PLUS. ISSUE 03. SEPTEMBER 2013
05/09/2013 23:41:14
TAXATION
BY
We have come a long way - but Revenue would like us to travel further
• September – reminders to Income Tax
clients, the final flurry of Corporation
Tax returns for December year ends and
more study/exam leave
• Last week of September – try to send out
the fees for the Corporation Tax returns
and start Income Tax returns
• October to 23 November – Income Tax
returns including the perennial clients
who think they can and should leave
everything until the 22nd or 23rd
• Last week of November – try to send out
the fees for the Income Tax returns
• December – hope to collect those fees,
tidy up, look at the files over six years old,
review policies and procedures, arrange
the Christmas Party, do Santa, (be Santa),
go for more hope and prayer on the fees
and finally 24 December arrives when
you close the office for a break and come
back in January and do it all again.
So what will bringing forward the Income
Tax filing (and payment) deadline mean for
all of that? I guess a key point is what might
be the new deadline date?
Kevin Elliot
• September would clash with the
Corporation Tax filing deadlines for
December Year ends and with CPA
exams.
• July and August are in Holiday Season.
• June clashes with ACCA exams.
• May clashes with CPA exams
As can be seen from the above, the status
quo has worked reasonably well for practices.
Bringing forward the deadlines won’t
impact for the minority of last minute filers
– they will always be last minute. But it will
impact negatively on the vast majority of
other timely filing clients.
If there is to be a change in the date then
there is going to be a massive impact on
practices of all sizes.
The knock-on impact will be a feat to manage:
• Will we stagger holidays?
• Do you get precedence if you are locked
into school holidays (quote Article 41 of
the Constitution)
• Will the CPA Exam Committee consider
moving the exam dates?
• Will the course providers move their
course dates?
• Will clients get the information to us
earlier next year?
• Will our Income Tax staff only get
holidays in October? (a new definition
of a “Tax Holiday”)
• What will the Income Tax staff do after the
tax filing deadline has been and gone?
• Will clients pay their fees any earlier?
While you can’t control the future, nor
predict it accurately, you can prepare for
some possibilities.
Given that this is looking to something that will
happen in the future, I thought I would close
on a musical note and relying on Doris Day:
Que sera, sera
Whatever will be, will be
The future's not ours to see
Que sera, sera
What will be, will be
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