The Revenue audit landscape is changing. Over the past number of years the Irish Revenue have significantly increased the level of resources devoted to Revenue audits and investigations. This has led to a major increase in the number of businesses audited each year.
However, it is not just the number of audits that’s changed, it’s the way in which Revenue conduct them. Revenue is increasingly shifting to using a more detailed driven audit approach which tests not only the tax treatment of payroll items at a high level, but also looks to verify each transaction on a line detail level. This can pose a real challenge to large organisations that run complex accounting/payroll systems.
Revenue also now uses e-audit methods as standard. This requires organisations to hand over vast amounts of their financial data as part of the audit process. It also allows Revenue to interrogate data in a way that was not possible in the past. Therefore, the risks associated with Revenue audits have never been higher, for example:
Today many businesses are taking a proactive approach to reviewing their tax affairs and recognise that they may have issues such as PAYE/PRSI underpayments that need to be disclosed to Revenue. The benefits of this “self-review” approach are reduced penalties when the additional liability is disclosed. Other non-employment taxes such as VAT or RCT may need to be included in the disclosures so a comprehensive approach is called for.
Our experience shows that a well planned approach to preparing for a Revenue audit can help to minimise the final settlement, as well as minimise disruption to business. Few organisations have the knowledge, experience or resources required to properly prepare for a Revenue audit. Revenue will generally look upon a pre-audit review carried out by an external adviser as a proactive effort by the taxpayer to test tax compliance, to identify and resolve any shortcomings and to settle any liabilities arising. The extent of the preparatory work carried out can result in limiting the scope of the audit in light of the work done. Our services are designed to assist employers to minimise risk, to spotlight process improvement and cost control opportunities, to negotiate potentially hazardous settlements and to protect solidly earned “good corporate citizen” reputations.
Apart from being selected for a Revenue audit, investigation or enquiry, the need for review of your tax affairs can also arise when changes in your business occur, for example, the introduction of a new payroll system, an acquisition or merger.
The list below outlines some of the hot topics with Revenue in the PAYE space:
Our team includes a number of former Revenue officials who have extensive and in depth experience assisting organisations with some of the largest and most complex audits. The vast majority have been settled without adverse disruption to the business, without publication, and on terms acceptable to our clients. By engaging our team to assist your organisation you can be confident that you are dealing with professionals with the necessary experience and insight to help you prepare thoroughly for the what can be the unwelcome intrusion of a Revenue audit. The team has access to the most up to date knowledge on PAYE/PRSI matters in terms of technical developments, hot topics for Revenue scrutiny and practical approaches which have been agreed with Revenue, and can:
Contact us if:
Director, PwC Ireland (Republic of)
Tel: +353 1 792 6818
Director, PwC Ireland (Republic of)
Tel: +353 1 792 6695