Contractor's Project - What are Revenue actually after?
Although this has been dubbed the “National Contractors Project”, what is really at issue is the incorrect claiming of expenses by both individuals and companies. It seems that the Project may have been triggered by instances of service companies paying high amounts of expenses to their employees.
In dealing with these enquiries under the National Contractors Project, you need first of all to establish that:
- The company is not claiming a Schedule D Case I/II deduction on non-business expenses, or
- The company is not paying expenses to employees instead of remuneration which should be taxed under PAYE.
You may need to consider:
- If expenses were actually incurred at all, or
- If the claims were in relation to non-business expenses, e.g. payments for personal goods and services for employees, or
- If expenses were excessive and not subject to appropriate controls, e.g. disproportionate mileage allowances
Particular care needs to be taken in defending the affairs of single member companies; typically where a professional provides services through a wholly owned company and possibly to very few separate clients. We understand that Revenue will look critically at the level of motor expenses and other expenses incurred through the company in such situations. Also we understand that expense claims will not be accepted on a percentage basis. Revenue have advised however that they would accept disclosures where expenses incurred were within industrial norms or were “reasonable for the sector”.
Our tax consultants can help.
If you have any queries on the above please do not hesitate to contact us on 6458100 or firstname.lastname@example.org.