Contractors & Revenue Audits
Here is our slidedeck from the Contractors & Revenue Audits Seminar. There are a lot of worried contractors out there!
Contact Anthony Casey if you wish to discuss your own personal position
Tag: Revenue Commissioners
How to reduce your tax bill
We are delighted to launch RadioNooneCasey a tax and financial initiative to save tax and structure your financial affairs efficiently. Our first podcast How to reduce your tax bill focuses on simple tax planning opportunities. If you have any questions on how to save taxes or how to structure your commercial & personal tax affairs more efficiently please contact Anthony Casey at 01 6766 476 or by email
Contractors & Revenue Audits
Noone Casey are hosting a seminar for contractors on 19th September 2013 at 6.30pm in the Alexander Hotel, Fenian St, Dublin 2 on Contractors & Revenue Audits.
The Revenue Commissioners are targeting contractors for Revenue audit following the success of their initial Contractor project in the Munster region. The first round of Audit notification letters has been issued with subsequent rounds being issued in the coming months.
Contractor Seminar on Revenue Audits
The Revenue Commissioners continue to roll out their Contractor Project. This ‘project’ has expanded from a Munster initiative to an National review of COntractors accounts and tax returns. Revenue have successfully challenged the tax returns of many contractors since the project began and have recovered significant amounts of underpaid taxes.
Noone Casey have been to the forefront of negotiations & discussions with Revenue as to the scope & impact of their audits.
We are hosting a seminar in early September to bring the Contractor community up to speed on the latest Revenue audit issues.
Register your interest in attending the Seminar with Ruth at 6766 476
Further details of the seminar will issue over the next 2 weeks.
Understanding Local Property Tax
The deadline date for electronic filing of Local Property Tax returns is 28 May 2013.
In this video, Chartered Accountants Ireland Director of Taxation Brian Keegan explains how this is a self-assessment tax, where the obligation is on the individual to ensure information held by Revenue is correct. He also looks at the tax from the perspective of self-employed people and PAYE workers and talks about ways to file.
If you have any questions about your Local Property tax contact Anthony Casey with your queries
2012 Pay and File ROS Extended Deadline – 14 November 2013
Revenue has confirmed that the deadline for those who file their 2012 income tax return and pay their 2012 balance and 2013 preliminary tax through ROS is Thursday, 14 November 2013.
CAT filings for gifts or inheritances with valuation dates in the year ended 31 August 2013 can also avail of this extended deadline where both return and payment are made through ROS.
Debt write off & CAT
The Revenue Commissioners have released the following statement re Capital Acquisitions Tax and debt write off. Basically no CAT liability arises.
Section 5 of the Capital Acquisitions Tax Consolidation Act 2003 provides that a person is deemed to take a gift where, under or in consequence of any disposition, that person becomes beneficially entitled in possession, otherwise than on a death, to any benefit otherwise than for full consideration in money or money’s worth paid by such person.
By virtue of the definition of “disposition” in section 2 (1) CATCA 2003 the release, forfeiture, surrender or abandonment of any debt or benefit, or the failure to exercise a right may be subject to CAT in certain situations.
Where for bona fide commercial reasons, a financial institution enters into a debt restructuring, forgiveness or write-off arrangement with a customer, Revenue’s approach, subject to being satisfied as to the bona fides of the arrangement (which may be subject to Revenue audit or enquiry) is that the financial institution is not intent on making a gift of any sort to the mortgagor/debtor – and accordingly the mortgagor/debtor would not be subject to a CAT charge in respect of any such debt restructuring, forgiveness or write-off arrangement.
This approach will only apply in the above-mentioned circumstances. In particular, should any debt restructuring, forgiveness or write-off arrangement be undertaken for the purposes of the avoidance of tax, the treatment outlined above would not apply.
Haven’t received your property valuation yet? It’s on ROS!
Revenue has advised that about 60,000 taxpayers will receive notification via ROS of their Local Property Tax (LPT) obligations. These are taxpayers who have an active ROS digital certificate. This would include taxpayers who may, for example, prepare their own VAT and/or PAYE/PRSI returns but have an adviser who deals with their income tax returns.
“The Revenue Commissioners have expressed dissatisfaction”
An interesting note from the Institute of Tax re an Appeals Commissoners decision on 12 March 2013.
“Appeal Commissioners Decision of 12/3/2013
As a result of a Tax Audit estimates on a re-grossed basis for PAYE/PRSI were made on a Company which had discharged third party liabilities of a Director. The Appeal Commissioner held that re-grossing was not appropriate and that PAYE/PRSI only applied to the amounts actually paid by the Company. The Revenue Commissioners have expressed dissatisfaction.”
You would nearly feel sorry for the Revenue!
Revenue Commissioners review of Contractors rolling out nationally with immediate effect
As you may be aware the Revenue Commissioners have launched a review of tax compliance by contractors in the Munster region. Revenue are focussing on both the One Contractor One Company and Composite/Umbrella company structures.
This project has been so successful for Revenue that they are rolling the review out nationally with immediate effect.
We recently met the Revenue Commissioners review team in Cork to assess their progress in this project.
The key issues we learnt are:
• Revenue believe a large number of contractors are over claiming home office and travel costs.
• Revenue have predefined parameters they are using to identify contractors to be audited.
• Once identified for audit, Revenue have specified levels of ‘unvouched expenses’ they are prepared to accept without penalty for the contractors.
• If contractors have levels of expenses which Revenue believe are unjustified, Revenue are seeking to charge interest of 12% pa and penalties ranging from 10% (unprompted disclosure) to 100% (liabilities discovered in audit) of the tax liabilities.
Following our meeting with the Revenue Inspectors, we are familiar with the audit parameters and unvouched expenses thresholds Revenue are utilising in this review.
Noone Casey are acting for numerous contractors in their negotiations with Revenue using our industry knowledge and the specific knowledge we have obtained in our meetings with Revenue.
If you are or have been contracting in the past 4 years and have any concerns over your tax compliance, feel free to contact me acasey@noonecasey.ie or 01 6766476 for a free, confidential review of your tax status.
Revenue Commissioners target IT contractors
So, the Revenue Commissioners have announced a review of ”the tax affairs of companies and their directors, where the main source of income is a contract or contracts “for service” with a larger company or companies (directly or through intermediaries), the company in question does not appear to have a substantial business separate from these contracts, and in most cases the director(s) are the only employees of the company and pay tax through PAYE”.
Revenue have “established that in many cases there are deficiencies in accounting for input costs and expenses, with the result that there has been a significant understatement of tax liability to the benefit of the director(s)”.
In other words, Revenue believe contractors are over claiming expenses relative to their work profile.
It is our understanding that Revenue are also examining the Umbrella/Managed company status of many contractors. There is real concern that the PRSI class applicable to many contractors operating through Managed companies is incorrect and substantial liabilities may exist.
This review is being carried out in the Revenue South West region incorporating Cork, Limerick, Kerry & Clare.
At Noone Casey we look after the tax affairs of many hundreds of contractors using our real time online accounting tool I-Finance. We ensure only appropriate expenses are claimed thus avoiding the issue of underpayment of taxes.
I-Finance is structured so that you
• Operate as a proprietary director of your own limited company. Why is that important?
o You have greater control over your own money – no 3rd parties controlling the bank account.
o You have no exposure from Revenue should they move against the umbrella/composite company structures.
o You can maximise simple tax saving techniques which are not available in a Sole Trader/Umbrella Company structure.
• We process all the financial administrative tasks relating to your contract – which gives you more time to focus on the things you want to do.
• We prepare and issue all your client-approved invoices.
• You dictate how much you want to be paid, we process the payroll for you and make sure all your PAYE/PRSI is correctly deducted and returned on your behalf.
• We monitor your company bank account and assist you execute a ‘same day payment’ model via online banking into your personal bank account.
• We offer you up-to-date advice on all allowable business related expenses.
• We prepare and file all your annual returns (both personal and company related).
• We advise you on how to financially plan for the future and assist you in selecting the best savings and investment options for you personally.
If you are operating as a contractor in the Munster region and have concerns over the expenses you have claimed and /or your Managed company structure, contact me today acasey@noonecasey.ie or 01 6766476 to discuss your affairs.
We will advise you on the correct route out of your potential difficulties.
Revenue & the Sheriff
The Collector General & the Revenue Commissioners have carried out almost 32,000 enforcement proceedures during 2012 recovering €210m.
The most common enforcement type was the appointment of County & City Sheriffs to collect debt amounting to almost €150m. This occurred on over 22,000 occasions.
Sheriffs fees can be in the region of 2% of the debt – resulting in an additional €3m in fees paid by the hard pressed tax payers.
Not bad work if you can get it!
Report of Comptroller and Auditor General Published
The report of the Comptroller and Auditor General for 2011 has been published. In relation to tax and Revenue it includes a number of interesting points:
• Income tax receipts increased by a net €2.5 billion (bn) in 2011 when compared with 2010, reflecting the introduction of the Universal Social Charge (USC) and the reduction in tax bands and credits.
• Tax forecasting has been made more difficult with the emergence of significant corporation tax losses. The utilisation of losses in 2010 is estimated to have reduced potential corporation tax receipts by €2.75bn.
• A new debt analysis tool was introduced on a pilot basis in February to allow Revenue case workers prioritise the recovery of debt by reference to the age of the debt. It also allows them to determine the type and timing of interventions to maximise recovery.
• Total tax outstanding at the end of March 2012 was just under €2bn. The two largest categories of debt outstanding are income tax and VAT. Overall, about one third of the debt outstanding was under appeal.
• 3 economic sectors accounted for 59% of the total tax written off in 2011; construction, wholesale and retail trade and accommodation and food services. The majority of these write offs arose due to liquidations and the trade ceasing with insufficient liquid assets
Thanks to the Institute of Tax for the above summary.