Following on from the recent project which focussed on the tax compliance of contractor companies in the South-West of Ireland, the Revenue Commissioners are broadening the scope of their project to include the Border, Midlands & Western region.
In a recent meeting with the Institute of Taxation it was confirmed by Revenue that the scope of the project has also been broadened, it now includes a wide range of contractors including engineers, project managers and software consultants. In addition, it will not be restricted to contractor companies but will include self-employed contractors, limited companies and directors of companies.
The majority of audits will be in the form of desk audits i.e. letters will be issued requesting information rather than visiting the taxpayers home/premises. All taxes (VAT/Corporation Tax/ Income Tax/PAYE/PRSI) will be included for the four years from 2008 to 2011. The focus will continue to be on âexaggeratedâ expenses claims, wages understated, payments to family members, and other expenses claimed. The issue of travel expenses will also continue to be a focus, with Revenue repeating their view that expenses incurred in respect of travelling from home to work are generally not allowable, and will only be allowable in extremely exceptional cases.Â
We would reiterate our previous advice to any contractor with doubts about the validity of previously claimed expenses – review them as a matter of priority and discuss them with your accountant. If tax has been underpaid it would be advisable to make a full disclosure to minimise the level of penalties applied
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We’re delighted to support the Hireland initiative by pledging a job. We have pledged to take on a new employee in a newly created Marketing Assistant role. The new Marketing Assistant role will be aimed at Marketing Graduates who will have the opportunity to gain invaluable experience in assisting with the implementation of a new Digital Marketing Strategy in a small growing company.
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The deadline for payment of the Local Property Tax (LPT) is approaching and self-employed contractors who fail to submit the return on time could face serious consequences in relation to their Income Tax.
Self-employed workers who fail to pay the LPT on time will be deemed not to have filed their income tax returns on time. This could lead to penalties/surcharges being applied to their income tax return.
In addition, Revenue will not issue a tax clearance certificate where there is unpaid LPT. The individual will not therefore be able to tender for business where a tax clearance certificate is required.
Whilst it had been made clear that Revenue would do everything within their powers to ensure compliance with the new Property Tax, this is another example of the self-employed being treated unfairly by the tax and social welfare system;
- Self-employed contractors provide their services through Limited Companies, and pay tax under the PAYE system on salaries drawn from the company. As they are self-employed they do not however qualify for the PAYE tax credit.
- Proprietary Directors and Self-employed workers do not qualify for jobseekers benefits when they are out of work, despite paying both PRSI and USC on their income. Â
The self-employed have a significant contribution to make to the future growth of Irelandâs economy. Itâs time to give them the support they deserve and address the inequity within the tax and social welfare system.
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