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If you earned more than €635 in interest last year....

Posted Monday, September 8, 2008

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Taxman

Starting next week, your bank will have to tell the taxman if you have earned more than €635 last year in interest.

As some banks pay 6% interest this would apply to people who have just over €10,000 in an interest bearing account at the bank.

The taxman is looking for 'hot money' which hasn't been already taxed so those who have done everything by the book and paid all their tax can rest easy in their beds.

However, those who have been indulging in a bit of the black economy, e.g. doing jobs and keeping the cash without paying tax could now be investigated.

Those who want to declare their black economy money have till next Monday to do so.

IT Systems

The Revenue's new IT system will tally the information on deposits and income tax returns and flag up any anomalies.

In other words, if you are not paying much in the way of tax and have a good sum of money in the bank then the taxman will be onto you.

Banks, Building Societies and the Post Office must now hand over the names of customers who earned more than €635 a year in interest in 2005 and 2006 by September 15th.

Interest earned in 2007 must be reported by October 31st.

Any interest earned by customers above the threshold must be reported by March of the following year.

Credit Union

The Credit Union will have to do the same for the financial year ending in September 2009 but won't have to do it for previous years.

It is expected that savers will now split up their money and place it in several different banks.

However, this won't work for the backdated interest, though, and anybody who has been salting away untaxed money from previous years will now face investigation - unless they had it in the Credit Union.

Confessions Wanted

The Revenue is telling people that they have to 'confess' by September 15th and pay by January 15th if they have more than €100,000 in untaxed money in an account.

As ever, those that have played by the book and paid all of their tax can relax, but those who have untaxed income in their accounts will now find that their bank will be handing over their details to the taxman.