Posted by TheYank at 11/1/2009 3:12 PM EST
For some Irish people yesterday was the most frightening day of the year – the day when they finally finish filling in their annual tax returns and pay what they owe the taxman. In America the big day is April 15, but the Irish tax authorities allow an extra 6½ months and require that returns be filed and money owed be paid by October 31.
Now the truth is that for most Irish taxpayers the day passes without notice. If you're an employee whose tax is deducted from your paycheck – known as PAYE – and you have no other source of income you don't have to file an annual return. The PAYE workers have the right amount deducted during the year so that they owe and are owed nothing. (Funny enough most PAYE workers could probably get some money back if they filed, but many, probably most, don't.)
However for the growing number of people here who, like me, work themselves or in temporary positions, October 31 is the day the return must be filed*.
The October 31 deadline surprises me now that our tax year matches the calendar year, but it wasn't always so. Until 2001 the tax year ran from April 6 - April 5. Odd dates, no? Well there's an interesting bit of history to that tale.
Centuries ago it was common to call March 25 New Year's Day. "What?," I hear you ask. Yep, March 25 was thought of as New Year's Day in many places around Europe, including England and Ireland.
"Why March 25?," I hear you ask. Well, you have to think back to year 1 and why 1 was followed by AD. That AD – anno domini – meant that year 1 was the year when the Lord was first among us. Okay? Now when would the year have started? Well, Jesus was born on December 25, but his conception was presumed to be nine months before that. So, March 25 was the first day of Year 1. March 25 was New Year's Day. Hard to get your head around that, isn't it?
So when accounting first began many businesses, guilds and/or cities adopted March 25 – March 24 as the accounting year. "But," you reply, "how do we get to April 6 – April 5 as the tax year?"
Well, hundreds of years ago the calendar was changed to adjust the leap years/leap days rules to better keep the calendar in line with the sun. So, what was March 25 was suddenly April 6. Hence, the accounting year changed and, therefore, we got the strange tax year that prevailed here until 2001 (and which still prevails in the UK).
Now fast forward to 2001. The government decided to make the tax year line-up with the calendar year. The move meant that the tax year ended 3 months earlier than it had, but the government decided not to shift the deadline for paying and filing. So we now have 10 full months to clear up our tax affairs after the tax year ends.
Unfortunately, for some of us that means an extra three months of procrastination and does nothing to alleviate the tension associated with the last week of October. October 31 remains the scariest day of the year.
* In a bid to reduce the amount of paper the revenue authorities need to handle, the the filing date is extended by two weeks for those who file and pay online.
Cheapest Irish pub in Ireland sells for $50,000