Revenue are poised to issue tax warning letters to technology contractor companies by the end of June, in the latest phase of their ongoing investigation into the sector.
This is according to an update issued by Chartered Accountants Ireland to its members today.
The Revenue “Services Contractors Project” targets companies which provide contracting services to a larger company. Its main focus is on the level of expenses claimed against taxable income.
Revenue believe that at least some expense claims are excessive and have previously invited companies based in the South-West region (counties Cork, Limerick, Kerry and Clare) to review their tax returns and settle any underpayments along with interest and penalties.
If you have a liability, you can avail of lower penalties by completing an Unprompted Qualifying Disclosure and settling the liability.
However, you must do this before Revenue notify you of an impending audit. Once you are notified of an audit, this option is no longer available, and you are then restricted to completing a less attractive Prompted Qualifying Disclosure.
If you feel this may affect you, you should review your situation immediately, preferably with your tax advisor. You should also consider getting independent professional advice – if only for your own peace of mind.
For more on the Revenue “Services Contractors Project”, see my previous blog posts on this topic.
For more on Qualifying Disclosures see the Revenue Code of Practice for Revenue Audit
Today’s Chartered Accountants Ireland update is here.