Latest Revenue Audit Code of Practice changes, condensed

16 December, 2019

The Code of Practice for Revenue Audit and other compliance interventions has been updated. The revised code came into effect on 16 October 2019. It will apply to all compliance interventions notified on or after that day.

Why has the Code been updated?

Revenue has indicated that "the revisions to the Code relate primarily to PAYE Modernisation". PAYE Modernisation or Real-time Reporting (RTR) came into effect on 1 January 2019.

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What are the changes?

  1. Changes to the 'self-correction without penalty' periods for employment taxes

    The Code revises the time limits applying to self-corrections without penalty. Under the revised Code, self correction of monthly statutory returns made in 2019 must take place by the due date for filing the Income Tax or Corporate Tax return within which the relevant PAYE period ends.

    For example, a company with a 31 December 2019 year-end, will have a corporation tax filing deadline of 23 September 2020. That company will be able to self-correct monthly returns filed in 2019 until 23 September 2020, without penalty.

    Revenue has indicated that the self-correction without penalty timeframe for monthly returns after 2019 is to be considered further. We will be engaging with Revenue on this matter.
  2. Fixed penalties

    The Code has been revised to include details of the fixed penalties which can be applied in the event of a failure by an employer to comply with tax legislation or the Income Tax (Employments) Regulations 2018. The fixed penalty is €4,000 per breach. These penalties can be imposed on a per item basis.

    In its Evaluation of Budget 2018 Compliance Measures (which was published in October 2019), Revenue reported that a total of €508,000 was applied in fixed penalties charges to 127 employers who did not operate the PAYE system properly.
  3. Register of Employees

    The Code has been updated to reflect the legislative requirement for employers to keep a Register of Employees. The obligation was previously set out in Employment Regulations. There is no substantive change to the obligation placed on employers to retain a Register of Employees (in paper or electronic format) showing the name, address, PPSN, date of commencement and, where relevant, the date of cessation of employment of all employees.

Why is this important?

For businesses, the most significant change is the shortening of the self-correction window and the fact that it is to be considered further by Revenue for monthly returns after 2019. It is critical that employers continue to review their business processes to ensure that they can report consistently and accurately in real time. Only by doing this will employers be able to manage the risk of having to self-correct within what appears to be an ever-decreasing window of opportunity.

Contact us

Doone O'Doherty

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6593

Jessica Webbley-O'Gorman

Senior Manager, PwC Ireland (Republic of)

Tel: +353 1 792 6518

Emily Bourke

Senior Manager, PwC Ireland (Republic of)

Tel: +353 1 792 6796

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