20 July 2000
Tax Year to change for first time in 250 years
Minister for Finance, Charlie McCreevy TD, announced today (20th July 2000) that from 2002 the income tax year will be aligned with the calendar year. From that point, Budget day tax changes and social welfare weekly rate improvements will be brought forward to 1 January. This will be of importance to taxpayers and social welfare recipients who will benefit earlier from Budget day changes compared to the current position where tax changes apply from April and social welfare changes from May. [It has been announced already that, in 2001, social welfare increases will apply from April.]
The Minister said "Using the calendar year will put the collection of income tax on a more rational and simplified basis. Combining this change with the Euro Changeover will allow necessary changes to IT systems to be made in one go".From 1 January 2002, the tax year will run from 1 January to 31 December. This means that next year there will be a tax "year" of nine months from 6 April 2001 to 31 December 2001. In tandem with the changeover to the calendar year there will be a change in dates for filing of tax returns and payment of tax for self-employed taxpayers. The new dates are attached as an appendix to this press release.
In order to facilitate the change, it will be necessary to have an earlier Budget day rather than early December as at present.
There will be some timing costs to the Exchequer from the rephasing of tax and social welfare changes.
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