Portfolio

Revenue Contractors Project

Since early 2013 the Revenue Commissioners have been carrying out a review of individuals and companies who operate as contractors. Revenue have advised that they will be issuing audit letters to contractors in the East South East region later this week.

The scope of the review includes sole traders, companies and company directors. Revenue will be contacting a wide range of contractors including, for example, engineers, project managers and software consultants. The focus of the review appears to be on “exaggerated” expense claims, wages/salaries, payments to family members and claims for other expenses and deductions.

Revenue intend that most of the reviews will be desk audits i.e. they will be conducted by post/e-mail rather than on-site audits. They will be reviewing the tax years 2008 to 2011.

“Home to work” expense claims are likely to be an area of contention. Clarity has been sought as to what exactly is allowable, but Revenue have indicated that they will only allow such expenses in exceptional circumstances.

If contractors believe that they have underpaid tax in the period 2008 to 2011, they have the option of making a “qualifying disclosure”.  Revenue have advised that disclosures will be treated as falling into the “deliberate behaviour/deliberate default” category in all but exceptional cases. This means that penalties will be applied as follows:

Unprompted Qualifying Disclosure                           10%

Prompted Qualifying Disclosure                                50%

No Qualifying Disclosure                                           75%/100%

A disclosure is treated as unprompted if a notice of intention to disclose is received by Revenue before an audit letter issues. A notice of intention allows the taxpayer 60 days to prepare the disclosure. As the audit letters are issuing this week please contact us immediately if you have any concerns in this regard. Also, please contact us immediately if you receive an audit letter so that we can advise accordingly.

TRA will be happy to assist with any concerns you have in relation to this matter, or any other matter. If you are contacted by Revenue we can work with you to ensure that the tax costs are minimised, and to ensure that the enquiry can be finalised with minimum disruption to you and your business.

 

This briefing is provided for general information purposes only and is not a comprehensive or complete statement of the issues it relates to. It should not be used as a substitute for advice on individual cases. Before acting or refraining from acting in particular circumstances, specialist advice should be obtained. No liability can be accepted by TRA Professional Services for any loss occasioned to any person acting or refraining from acting as a result of any material in this briefing.

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