Revenue extend RCT Errors Grace Period

The Revenue have announced a 1-month extension to the limited “grace period” that they allow for disclosure and correction of RCT errors made in 2009.

The concession is now available until 15 April, with a further extension to 23 April for taxpayers who filed their 2009 RCT35 return on ROS before the recent 23 February deadline. It refers only to cases of genuinely once-off errors by otherwise compliant taxpayers.

I outlined  in a recent post how this concession works.  It is explained in more detail on a Revenue statement dating from 2007.

If you have recently completed an RCT35 return, you should now double-check your RCT compliance for 2009, to ensure that any outstanding matters can be resolved with Revenue within this grace period.

Roofer

Unfortunately, the concession is of very limited use to small construction operators. This is because, under its terms,  a fixed penalty of €3,000 still applies to each separate RCT breach disclosed to Revenue.

This fixed-penalty system can have cruel outcomes for small operators, with limited means.

Take the hypothetical example of a minor builder, who discovers that he inadvertently neglected to apply for a 2009 payments card for a carpenter, who holds a C2, and to whom he made 2 payments totalling €20,000 last year.  The builder, a compliant taxpayer, now approaches Revenue and discloses these breaches. He gets hit with a €6,000 penalty for his trouble.

I would argue that this is a perverse incentive.  Human nature will dictate that errors will occasionally be made, by even the most scrupulous of taxpayers.  I think it is important that the tax code allows taxpayers some form of facility to notify errors to Revenue once they find them.   There must be a better way to encourage compliance with RCT.

The latest Revenue Statement is here.