There seems to be an endemic attitude in all of us here in Ireland to wait until the very last minute to deal with our taxes.
This has been proven again and again when tax consultants offer significant discount on fees to clients if they come forward in late spring or mid-summer to get their income tax returns done, instead of waiting until the end of October to bring in all their files. Nobody takes them up on the offer!
For those who have paid too much tax and are due a refund, this is crazy. Why would you leave YOUR money with Revenue when you can get it back very quickly?
The Revenue On Line (ROS) system is really excellent – a world leading technology interface that even a fool like me can use to great effect.
So when you do your Income Tax return and you’re due a refund, this turns around surprisingly quickly. Remember we’re in a Self Assessment world here in Ireland – Revenue accepts your assessment of your affairs while reserving the right to come back in the future to see proof of what you have returned to them.
But for those who are net payers of tax, it is still very unwise to wait until October to find out how much you have to pay. As “information is power”, then would it not make eminent sense to prepare (not necessarily submit) your Income Tax Return in April or May? At least then you have five or six months to plan how you are going to pay it.
I have encountered so many people who, when up against the deadline with tax to pay, then opt to put some money into a pension to reduce this tax bill – greater burden of pay-out.
Now we LOVE people making pension contributions but it is simply not healthy, not least from a cash flow point of view, to be making investments into pension under a severe time pressure. It won’t make for a good investment decision more often than not.
