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SELF-EMPLOYED CONTRACTORS have underpaid €9.3 million in tax.
Of the 385 company audits completed by Revenue since July 2013, additional liability was found in 299 cases (77.6%), while a further 49 directors of contractor companies also agreed settlements.
Speaking in the Dáil on Wednesday, Finance Minister Michael Noonan said that additional tax of €5,969,630 had been identified, with penalties of €1,765,995 (30%), and interest of €1,639,623.
He said that a further 368 companies remain under audit.
“Most of the audits now open indicated their intention to make a disclosure to Revenue some months ago and availed of a concession whereby Revenue agreed to allow additional time and to provide guidance in compiling disclosures,” Noonan stated.
Revenue has now written to those taxpayers advising that the process of preparing disclosures must be completed urgently if the benefits of voluntary disclosure (which encompass lesser penalty and non-publication provided certain specific conditions are met) are to be preserved.
The contract companies audited covered a range of sectors including IT, administration and support. They provide services under contract to third-party clients.
Fianna Fáil spokesperson Michael McGrath said that the amount of money owed was “staggering” he noted that many of the contractors were acting on “professional advice” from accountants.
“The people who provided that advice have very serious questions to answer.”
In light of these startling figures, any self-employed contractor providing services through a company under contract to a third party client would be well advised to have their tax situation independently checked to ensure they are not building up a massive bill of underpaid tax and punitive interest and penalties.
A pilot contractors audit project was operated in Revenue’s South West Region in 2012 and 2013 found that 89.9% - 107 out of 119 - of the companies checked had underpaid taxes. A further 24 directors agreed settlements.
The total additional tax liability in these cases was €2,801,977. Penalties of €906,433 (32%) and interest of €857,216 were imposed.
Noonan said that these findings made it “clear that there was a pattern of behaviour which warranted a national audit project.”
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Of course they are underpaying taxes to revenue. If someone self employed becomes unemployed, they are not entitled to the dole or any social welfare.
So im guessing they are only preparing for the worst case scenario and putting aside a bit to take care of them if the worst were to happen
Yes they’re planning ahead … We’re famous for our forward planning in Ireland
Fionn – you could also argue the point that the reason the self employed get nothing if their ventures go to the wall is BECAUSE of this type of activity.
So because they’re not part of the same social welfare system as PAYE workers, they see fit to cheat and con and steal from their fellow taxpayer. And then they wonder why we don’t care about them.
Self employment is for many the only option – many if not most contract staff must work on a contract basis – people need to pull their heads in a little – a contractor can be anything from your office cleaner to an IT consultant.
Taxes are calculated by either your own accountant or for many the management company which assists them with their taxes and salary. It is a form of self assessment where an estimated tax is submitted through the year, followed by a tax return form to Revenue and a few weeks later you are informed whether you owe them more or they owe you.
I received a sizeable refund a couple of weeks ago but Noonan doesn’t advertise the self employed who have overpaid and given the state the use of hundreds and thousands of euros each for many months. This is a non story and another attempt at divisiveness by the government and to drum up support to raise taxes on the self employed who are the only tax paying group in Irish society not entitled to benefits if/when their contracts end – and then people wonder why we get pissed off with all the handouts to welfare tourists.
Should Noonan attack the self employed he will ensure FG will never be elected again.
Any company who deals with cash fiddles the books. Eg chip shops like how can revenue know how many bags of chips a place sells. Yummy I am off for a bag
Estimate it from the number of bags of potatoes they’re buying.
revenue buys a bag of chips and measures it weight and then compares that against amount of spuds purchased in there invoices to see how many they should of sold
You just put the price of chips up by at least 50c
So how will revenue know how many spuds they buy ? Cash to a supplier for spuds ? Buy the spuds in supermarket ? Grow your own ? I would think even the suppliers would give good cash deals
Receipts. Acreage of spuds. Footfall on a random Tuesday night. Comparable businesses. Use your imagination.
Your funny lol
Jail them.
The answer is forensic accounting.
Emily
He doesn’t have an imagination!
Peter that depends on the size of the bag. What bout jow many pieces of Cod they sell? Sorry Vooley.
Most self empliyed people have great imaginatoons – especially when claiming fro the Revenue.
Typo – COOLEY
The problem is with the tax system. Try to find out what is allowable as expenses is very difficult. You hire an accountant to tell you what you can claim.
I have had accountants tell me opposite to each other. Rang the tax office and they wouldn’t tell me one way or the other. How are you meant to know?
You claim for everything. The will soon tell you what isn’t allowed.
That is part of the problem they won’t tell you unless you are audited. It maybe 5 years later that you find out and then have to pay them back with penalties.
It even depends on who audits you. The rules are overly complex and revenue can’t even give a clear answer when you ask.
Perhaps people in charge of their own tax filing will take more responsibility if the leaders at the top dud the same! As it stands, i believe a self-employed person is fighting against the state aswell as the market to stay in business. Perhaps the TDs in Dail Eireann should lead the pitch with offering half their salaries to support the ambitious self-employed. The headline here leads one to believe that all self-employed persons are wealthy, keep going killing anybody trying to make a living FG! Pathetic!!!
@Karl.
I’m sure Revenue have a brochure on whats allowed, or if you care to check in legislation in place the allowances are detailed.
Most Accountants know exactly whats allowable but perhaps ate not telling you. After all, they need to make a living as well.
So WHY DONT PAYE WORKERS NOT RECEIVE THE SAME ALLOWANCES ?
Travel, meals, ink, wgat else. Oh Yes – Entertainment.
James, THERE’S NO NEED TO SHOUT.
Perhaps if the self employed had the assurance of dole if their company didnt work they may feel more obliged to submit everything. I cant fathom how you wouldnt be helped considering you contributed to society and showed initiative.
In reality it’s not that though. It’s just easier to cut the gov out. I empathise, but it’s not like if the self employed had the availability of dole etc, they’d all ‘no, no’ when someone suggested a cash transaction.
This isn’t cash in hand transaction. They wouldn’t find them in an audit. This is about what you can and can’t claim.
There was quite a shock to many contractors that daily allowances weren’t allowed. In previous years there was no problem doing this. Then revenue decided it wasn’t allowed. No regulation change just opinion. Many contractors weren’t informed by their accountants.
I suspect that is one reason the underpayment was so high.
Always wondered why highly educated people such as GP’s never seem to have cash registers and only give you an un-duplicated hand written receipt. Also most of them never seem to have a credit/laser card facility. hmmmmmmm
Please see attached story relating to Dennis O’Brien and a few companies that he purchased in the past few years getting a total of €300 million wrote off by banks as part of the acquisitions. Thy’re out putting all of this work into tracking down €30 million from hard working self starters and doing everything they can to pander to the incredibly wealthy. I couldn’t care less if a chipper never declared a penny of their income, I’d do it myself if I could. I don’t trust them with a cent of my money and it sickens me every month paying it over to them through PAYE.
Revenue decides your underpaying then slaps you with bill you can’t afford then interest and penalties that are greater than the amount.
Argument with revenue is one way unless you have lots of money and resources to challenge them.
Can you blame them when you see what the govmint does with the tax money?
Hallie Burton would love to give you a thousand votes on that comment
Pay them more taxes so they can give themselves bigger pension!!!
Private sector wasters
They haven’t underpaid €9m in tax since july 2013. What a load of rubbish. Those audits will have gone back over last six years of the contractors accounts so it should read €9m since 2008 and also a lot of that 9m will be interest and charges.
In my experience much of this is non resident contractors who fly in on Monday and out on Friday and who are not resident 180 days per year as a result. And nobody tasks about the fact that most contractors are hired as such by companies who want to evade employment laws. Almost all IT vacancies now are contract, almost impossible to find a permanent job.
Oh and the accountants take up to 5% of your invoice plus it’s a myth you can claim entertainment, that’s pretty much impossible. In my experience stuff you can claim is almost the same as what paye staff are allowed, sometimes less.
Happens in every country, not just Ireland.
So what does our genius government do to prevent people operating in the black market? They charge you to write a cheque? Well done lads.
So to avoid paying the penalty for writing a cheque to the plumber (who won’t have a mobile card machine with him), I pay cash and the government get no tax money.
Pure genius.
By the way, it’s very worrying the way so many are now employed as contractors. Pilots, nurses etc. etc.
I was in Israel years ago on a holiday and heard how the revenue would count the rinds off a Pitta bread in the kitchen bins to estimate sales. The restaurants just started slitting them instead of cutting the tops off.
They are traitors to the working class.
More copy and paste from a waning troll
A chara. You are a traitor to the working class.
Jaysus,
Groudhog day
A very good film. Not working class enough though.
I’m admiring your persistence
A chara.
A. Chara, even SF don’t want you, you need help!
I’m beginning to think that Constance is just a ‘bot doing a reverse Turing test on us…
A chara. Sinn Fein do want me and I am a valued member in my area if Darndale.
Constance will you be running for sf in Sligo in the next election
You represent nobody but yourself, you are an irritating clown.
Away sitting your Junior cert, were you?
what does “a chara” mean?
My friend
It has always intrigued me that supposed highy educated people such as GP’s never seem to be able to operate a cash register and can only issue an un-duplicated receipt, and finally they rarely have a credit card/laser card facility. Just saying….
That’s because their old school. Old school is untouched by technology . Sure I know a world renown in his field maths professor who can’t change the time on the windows clock the same guy uses acetates to lecture while everyone else uses powerpoint.
There goes thejournal.ie again. Winning first prize in the category for stating the bleedin’ obvious
What happens in most Irish people case who work and are paying to much tax like 65% . How the hell can apple pay 2% and nobody else. Noonan and Kenny are so much up each other ar*e they forget people now paying to much tax including self employed. Let then go and screw apple for the shortfall and inequitable treatment.
Probably the worlds best unkept secret!
The annoying thing about running a cash business is that the state assume you are out to con them, so they never leave you alone. Managed a restaurant where we did everything by the book. Taxman would just not back off. Turns out their policy is to assume restaurants are under declaring by about 40%. Thought we lived in a country where you were innocent til proven guilty; not if you’re a restraunteur, apparently.
How much tax are all the politicians underpaying ??????
DI**HEAD
Constance Markievicz is one I the brightest Shinners that I have ever come across.
What about b and b’s taken in people driving through. Not registering them and getting cash in hand
What’s up Noonan , are your pockets not being lined enough .
Martin Callinan would say about this artical, discusting discusting discusting
Polititions under paying by millions too but i dont see a report on that
If they have failed to lay their just tax liability prosecute them!
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