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The 2003 Finance Act introduced a ‘Pay and File’ system for Corporation Tax that will affect the payment of Corporation Tax and filing of Corporation Tax returns for all companies with accounting periods ending on or after 1 January 2003. The payment and filing rules for accounting periods ending on or before 31 December 2002 and prior remain unaffected.
This leaflet explains some of the more significant changes brought about by the introduction of Pay and File and the changes to the payment and filing requirements for accounting periods ending in 2003.
The main change for Corporation Tax, brought about by the introduction of Pay and File, is that any balance of tax due, in respect of accounting periods ending on or after 1 January
2003, is now due on the return filing date, nine months after the end of the company’s accounts period. Companies are now required to pay and file on the same date. In addition, if the accounts period ends after the twenty-first day of the month, the filing date and payment date have been brought forward to the 21st of the month. Thus, for a company with an accounts year ending on 31 January 2003, the latest date for paying the tax and filing the return is 21 October 2003.
Under Pay and File, therefore, there is now an onus on the company to calculate its tax liability before submitting its return and it must also pay any balance of tax due at the same time as submitting its return. The easiest and most efficient way to do this is through the Revenue On-Line Service (ROS). You can access ROS through the Revenue website at www.revenue.ie
Companies file their Corporation Tax returns on Form CT1. For 2003 there are some changes that you should be aware of: n n
Change in Place of Filing
Under Pay and File the location for filing Corporation Tax returns has changed.
Returns for accounting periods ending after 1 January 2003 should no longer be sent to the local tax office but should instead be sent to the Office of The
Collector-General, PO Box 354, Limerick.
Personalised return/payslip
The 2003 Pay and File return has a personalised barcode, printed on the front page, to assist the Collector-General’s Office in capturing the date of receipt. The return will also have a personalised payslip, to assist in the payment of any balance of tax due at the time of submitting the return. However, if you avail of ROS, there is no need to use the payslip.
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n Extracts from Accounts
For 2003 it is no longer a requirement to attach a copy of the company’s accounts with the Form CT1unless the company turnover exceeds £ 13m. Instead, you must provide details of certain figures extracted from the accounts, as required on pages
3 and 4 of the 2003 Form CT1. It is important that these pages are completed for every item that has a corresponding entry in the accounts.
Returns submitted without the accounts extract details being completed will result in the forms being returned for completion and this could result in surcharges for late filing.
In general, Corporation Tax is currently payable in three stages, with Preliminary Tax payable in two instalments, the first, one-month prior to the end of the accounting period and the second payable six months after the end of the accounting period. The final payment, i.e. any balance of tax, is payable nine months after the end of the accounting period (together with the return under Pay and File) see Table 1 . In addition, where an accounting period ends after the twenty-first day of the month, the payment date has been brought forward to the twenty-first day of the month, as follows:
à For accounting periods ending after 1 January 2003, both the second instalment and the balance of tax must now be paid on or before the twenty-first day of the month where the accounts period ends after the twenty-first of the month.
à For accounting periods ending after 2 July 2003, all payments must be paid on/before twenty-first day of the month where the accounts period ends after the twenty-first of the month, see Table 2 .
[The tables below give some examples of the payment dates both prior to and post
1 January 2003:]
Table 1. Accounting Periods ending before 21st day of the month
Accounts
Period Ended
(A.P.E.):
1 st Instalment 2 nd Instalment Balance
Position for
A.P.E. 31/12/02 and prior
(See Note)
New Position
A.P.E. on/after
1/1/03
A.P.E. 20/12/02
A.P.E. 9/2/03
A.P.E 17/7/03
A.P.E. 20/8/03
20/11/02
9/1/03
17/6/03
20/7/03
20/6/03
9/8/03
17/1/04
20/2/04
1 month after assessment issues from
Inspector
9/11/03
17/4/04
20/5/04
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Table 2.
Accounting Periods ending after 21st day of the month
Accounts
Period Ended
(A.P.E.):
1 st Instalment 2 nd Instalment
Position for
A.P.E. 31/12/02 and prior
(See Note)
New Position
A.P.E. on/after
1/1/03
A.P.E. 31/12/02
A.P.E. 31/1/03
A.P.E. 30/7/03
A.P.E. 23/8/03
28/11/02
28/12/02
21/6/03
21/7/03
28/6/03
21/7/03
21/1/04
21/2/04
Balance
1 month after assessment issues from
Inspector
21/10/03
21/4/04
21/5/04
[Note: For accounts periods ended on or before 31 December 2002, the return was due
9 months after the end of the accounting period with the balance of tax payable one month after the Inspector issued a notice of tax assessment based on the return submitted.]
You can now pay Corporation Tax liabilities using the Single Debit Authority (SDA) method of payment. Simply enter the amount to be debited from the companies bank account in the SDA field on your payslip and supply the bank details of the companies account to be debited.
If the company is in a refund position and wishes to have the refund credited directly to the companies bank account, simply complete the “refunds due” field with the amount of the refund and supply the bank details of the companies bank account to be credited.
You can file your return and/or pay your tax on-line using the Revenue On-Line Service
(ROS). This facility is available 24 hours a day, 365 days of the year. ROS offers the quickest, easiest and most convenient way for you to meet your tax obligations under Pay and File as it provides an instant, accurate and timely calculation of your final liability.
There are other benefits from being a ROS customer. For example, you can also get instant secure access to your company's tax records. You also get an immediate acknowledgement of all transactions.
Registering as a ROS customer is a simple process and can be done via the Revenue website at www.revenue.ie
. However, as registration can take up to 2 weeks to complete because certain passwords must be sent via land mail, give yourself adequate time if you are registering.
For further information on ROS, including ROS payment options, please e-mail roshelp@revenue.ie or contact your ROS liaison officer in your local tax office. A full list of liaison officers is available on the ROS site.
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