24 September 2013
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Taxation Issues for SMEs
by Abina Kenneally, Tax Partner

Business Plus Magazine recently featured a piece on 'Revenue Audit - Best Advice from the Tax Experts'

Abina Kenneally, Tax Partner at Quintas participated in this feature and the article appeared as follows:

Revenue is now pursuing single-person contractor operations nationwide.  Primarily they are looking at mileage and subsistence rates, though they are also reviewing wages to wives and children. 

Contractors need to be aware of the risks associated with this investigation and give serious consideration, following in-depth consultation with their tax advisor, to make a voluntary disclosure, if that is deemed necessary

Preparation is vital to ensure a successful outcome from a Revenue audit.  As very few audits are random, it is imperative to carry out a careful review of relevant transactions in the period under review to ensure that they were accounted for correctly.  Current areas of concern include incorrect VAT rates being applied, employee or self-employed, motor expenses and R&D tax credits.  Mileage and subsistence rates, BIK and VAT issues need to be continually assessed as this is where we are seeing Revenue collecting a substantial amount of money. 

While there have been some welcome changes to the tax regime, such as the reform of the three-year corporation tax for start-up companies to allow unused credits to be carried forward, and the increase in threshold for the cash receipts basis for VAT from €1m to €1.25m, the removal or reduction of reliefs have had a negative impact on business and the economy.  For individual, the reduction in tax credits and cut-off point and the increase in the USC have had the biggest impact.  The economy needs a kick-start by ensuring that all taxpayers are in a position to spend more and save a little, and this can only be achieved by ensuring that no further tax hikes are enacted. 

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