Tax Briefing December 2013

Following on from the foundation laying exercise in Tax Briefing 3 2013, Revenue have brought out Tax Briefing 4 to ensure IT51(Employee Motor Expenses) and IT54(Employee Subsistence) are at the front of everyone’s mind when discussing the contractors project. This Briefing has taken the form of a work in progress summary for the Contractor’s Project, and to outline some of the main issues that have been found. They touch on the fact that they are willing to listen to taxpayers who play ball, and again re-emphasise the concession of not re grossing disallowed expenses, which would be the norm with standard audits. The piece goes on to explore IT51 an IT54, and presuming we all did our homework from Tax Briefing 3, the whole topic will be on the tip of our tongue! Revenue does state that each audit must be dealt with on an individual basis, however the elephant in the room is without doubt “normal place of work”.  We are not to be under any illusions regarding home offices and to rubber stamp this, the bold type states ”Home cannot be treated as normal place of work”. The bottom line from this is that normal place of work rules will be strictly adhered to. I am unsure as to the reason for making the point that Statute does not refer to normal place of work, perhaps there is something going on at a higher level to address the predicament many contractors find themselves in. Employment of family members is a fairly consistent issue, and it is accepted that a small salary is acceptable, however anything beyond market rates would come under scrutiny. Many of the closing paragraphs and answers to questions raised so far at seminars and audits..

• Penalties- No change to original stance, most classed as deliberate default
• Scope of Audit-Contractors and their Personal Service Companies
• Years audited- 2008-2011 (So far)
• Previously audited- does not give a free pass
• Inability to pay- Dealt with under normal rules

The article does try to reassure us that Revenue are willing to meet and have met with the stakeholders in the contracting industry, and in the last few lines hints at a successor project which I guess has come from things they have unearthed so far. (oh the excitement!!) John Bell, Finance Director, Icon Accounting.