Surcharges on Late Returns for Directors

Revenue have recently updated their briefing on surcharges to apply to Directors returns.

Company directors and their spouses/civil partners, if jointly assessed, are obliged to file a self-assessment return every year. If a company director fails to file their annual return, a surcharge will be applied based on their income tax liability before credit for tax paid.

Certain directors are not required to file an annual income tax return such as;

• Directors of Shelf Companies
• Directors of dormant companies
• Other temporary directorships in the period before the company commenced activity
• Directors which during the 3 years ending on 05^th April in the year of assessment;
  • was not entitled to any assets other than cash on hands, or a sum of money on deposit, not exceeding €130,
  • did not carry on a trade, business or other activity including the making of investments, and
  • did not pay charges on income within the meaning of section 243 TCA

Proprietary directors, where the director controls more than 15% of the shares of the company, is required to file a self-assessment return.

Non-Propietary directors do not need to file an annual return if;

• all of their income, including fees, benefits, distributions, etc., is taxed through PAYE and
• they would not be chargeable persons under self-assessment apart from being directors

However, a surcharge will apply if they;

• are chargeable persons otherwise than by reference to their directorship and
• are obliged to file a return of income and
• the return is filed late

Why not read our previous blog regarding the legal and tax implications for Director’s loans here

Should you have any queries on this issue, please contact us on 01 5397999 or info@itasaccounting.ie