Revenue Audits
Clients are often surprised and a little panicked when they receive a letter from the Revenue Commissioners advising they have been selected for a Revenue audit. We discuss here why this happens and what you need to do.
Why I have I been called for a Revenue audit?
There are several circumstances where you might be selected for revenue audit:
- If you are continually late in submitting tax returns
- If your margins and tax returns differ from industry averages
- If you run a cash business such as a cafe there is a higher chance you will be called for an audit
- If during the course of their normal work the revenue uncover bank accounts in your name that you have not declared you are highly likely to be selected for an audit.
- Lastly, every year Revenue pick a small number of taxpayers at random to audit.
What should I do?
Firstly, it is important to seek advice from your advisor/ accountant as they will have the experience to guide you through the revenue audit process- call us now on 1890987609 or email here and someone will come back to you soon. Detailed preparation in the lead up to the audit is important. You should review all accounts and records for the year(s) concerned and make sure you have all of the necessary files / records available. If during this process you become aware of mistakes/ issues that may mean you have underpaid tax it is important to disclose this before the revenue audit begins.
The Day Itself
Revenue will normally insist on the audit being performed at your place of business. They will usually not agree to carry out the audit at your advisor’s office. When the Revenue auditor arrives he will show his identification. The auditor will then ask whether there is any further disclosure the client you wish to make. If there are no such disclosures the audit officially commences.
It is important to understand that Revenue have extensive resources to collect information on businesses. These include:
- Details of bank accounts provided by banks
- Information from foreign Revenue authorities on foreign property
- Industry averages from previous audits of competitors
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Information from customers and suppliers
You should review your rights under the Revenue’s customer charter. This charter sets out how a taxpayer can expect to be treated by Revenue and is available to the Revenue website.
Normally the site visit is completed in 1 day but can last a number of days depending on the size of the business and the level of co-operation received from the taxpayer. The Revenue auditor will then return to his office and prepare a report. A letter will then be issued to the taxpayer confirming if any issues were discovered and the amount of tax and penalties due or confirmation that there is no additional liability. If you are unhappy with the findings of the Revenue auditor you can make an appeal but this appeal must be lodged within 30 days.
Lastly, remember that a Revenue Audit is not the same as a statutory audit. The majority of small companies in Ireland do not need to have a statutory audit however any business can be called for a Revenue Audit. Registered Auditors must perform a statutory audit whereas your accountant can help you with a revenue audit/ investigation.
