Professional contractors & Revenue Audits

The Revenue Commissioners launched their Contractors Project in the Revenue South West region (ie Munster) in Spring 2013 following what they perceived as wholesale tax evasion by professional IT, engineering and pharmaceutical contractors in the region.
Revenue believed Contractors were overstating their entitlement to travel and subsistence costs and have set out settlement terms for Contracting companies who chose to disclose their tax liabilities
Following the success of this Project in the South West region and subsequently in the Border Midlands West Region, the Project has been rolled out nationally since July 2013.
Revenue have written to hundreds of Contracting companies in the past number of weeks looking to audit those companies.
In the interim, Revenue have issued a Statement clarifying what they see as allowable travel & subsistence costs for contractors. In essence Revenue believes little or no travel & subsistence is allowable for professional contractors.
In addition Revenue are challenging the umbrella company structure many contractors operate under claiming these companies do not comply with PRSI legislation
The Institute of Taxation in Ireland has criticised the Revenue position as failing “to take account of genuine situations where an individual’s work operations are based at their home and the majority of their work takes place at home, rather than at any other premises.”
The Institute also point out the apparent contradictions between the new Revenue policy and a range of existing Revenue arrangements and concessions, including:
• construction industry “country money”,
• allowable subsistence for foreign travel and,
• the Budget 2012 Special Assignee Relief Programme and Foreign Earnings Deduction schemes.
Noone Casey, Chartered Accountants are Ireland’s leading specialists in advising professional contractors. Anthony Casey, managing partner, states that the overzealous & inappropriate claiming of expenses by a minority has resulted in a nationwide crackdown on contractors.
Professional contractors claiming Revenue pre-approved expenses are now having those expenses disallowed by Revenue auditors. Contractors operating through Umbrella type companies find that Revenue auditors are looking through those companies and challenging the status of the individual contractors.
Anthony Casey is in agreement with the Institute of Taxation’s response to the Revenue Commissioners.
‘If individual contractors are operating through inappropriate structures or are over claiming expenses, it is entirely appropriate of Revenue to challenge those structures and recover the taxes. It is not appropriate however for Revenue to seek to impose more onerous guidelines and restrictions on professional contractors that do not apply to other businesses. Each contracting business should be reviewed as a standalone trading entity and judged on its own merits.
Due to the confusion and concern arising within the contractor community, we are arranging a seminar on Contractors & Revenue Auditors. The Revenue Commissioners will present their position at the seminar and will take questions from attendees.
The seminar is being held at the Alexander Hotel, Dublin at 6.30pm on 19 September.
Contractors seeking to attend should register with Noone Casey online or by phone at 01 6766 476.