Munster’s first independent VAT consultancy practice providing specialist VAT and Indirect tax advisory, assurance and interim management support services to owner managed businesses, small & medium enterprises, accountants and legal practices.
Contact Details
The VAT Practice,
The White House, Cloncorban, Rossmore, Clonakilty,
Co. Cork
Principal: Nicholas Ryan
Tel: +353 (0)23 8838181
Mob: +353 (0)83 3340324
Fax: +353 (0)23 8838181
Email : info@thevatpractice.ie
Revenue news
Friday, October 1, 2010
by Nick Ryan
Over the past year there have been a number of e-briefs issued on VAT and we propose to cover the more interesting ones in following issues. Released on 1 October is the revised or New Code of Practice for Revenue Auditors. This is an update of Revenue’s original Code released in 2002.
The most notable addition is the inclusion of the changes introduced in Finance Act (No 2) Act 2008 on changes in relation to penalties, publication and the determination and definition of errors. These changes are significant in that the goalposts have been clearly moved in the assessment and application of penalties from the taxpayer to Revenue. Now Revenue can impose a penalty through the Courts where agreement between parties can not be reached. This move can allow Revenue greater freedom to seek a fast settlement and conclusion to disclosures and audits through the pressure they can now impose on the tax payer to settle on Revenue’s preferred penalty otherwise opt for a costly and potentially lengthy court settlement.
Also of note is the change in approach to audit to be undertaken now announced as a multi-faceted approach in tackling non compliance. Revenue are demonstrating their adaptability in policing the taxes covered to include a number of approaches including the standard audit we are used to, investigations and, non audit interventions.
The latter is encompassed within their new process based on their risk analysis system REAP, Risk Evaluation Analysis and Profiling. This is Revenue’s system for benchmarking risk among businesses by size, industry, activity etc. Revenue will utilise all their own internal knowledge together with external factors in order to assess the potential for and level of risk in a particular industry and location that therefore can predetermine where they can best utilise their efforts in collecting revenue. It is a significant step taken to control the taxes covered and I have highlighted the approach in one of my earlier blogs, the Aspect Review.
My experience of this highlighted the level of investigative work undertaken by Revenue prior to triggering the non audit intervention. What was apparent once the aspect review was underway was the level of information they has on the business concerned and their expectations as to how the business should be dealing with the taxes concerned and what the anticipated throughput of tax should be.