For income tax purposes a person within the scope of the self – assessment system is a “chargeable person”. This mainly refers to self – employed persons and directors with more than 15% shareholding in a company however it includes those with a source of investment or rental income where the tax due cannot be recovered by restricting their tax credits under the PAYE system.
An individual in receipt of both PAYE and non PAYE income will be regarded as a “chargeable person” if the total gross income from all non PAYE sources / the net assessable income reaches certain thresholds. A chargeable person will then be obliged to file an income tax return.
There are other ways in which an individual, not normally obliged to file an income tax return, may find themselves a “chargeable person” for the year. For example, where a person is chargeable to tax under Schedule E from the exercise, assignment or release of a share option that person will be regarded as a chargeable person for that year.
Failure to submit an income tax return on time will lead to a surcharge of 5% or 10% of the tax payable depending on how late the return is.
Many PAYE / PRSI employees find themselves obliged to file an income tax return because they purchased an investment property and are in receipt of rent. If you are such an individual it is worth your while looking at the basic rules surrounding the taxation of rental income.