This article is specifically on the Short Term Enterprise Allowance. Despite the myth there is financial support for those going the self employed route who need assistance from social welfare.

Short-Term Enterprise Allowance

• Introduction
• Rules
• Rates
• How to apply
• Where to apply

Keeping Records and Revenue Audit

• Keeping Books and Records
• Revenue Examination of Returns, Books and Records

Keeping Books and Records

• Am I obliged to keep records for tax purposes?
• How long must I keep records?

Am I obliged to keep records for tax purposes?

YES. You must keep full and accurate records of your business from the start. You need to do this whether you send in a simple summary of your profit/loss, prepare the accounts yourself, or, have an accountant do it. It is important for you to remember that the figures which are contained in your accounts, or your summary of profits/losses, or your tax returns, must be correct. The records you keep must be sufficient to enable you to make a proper return of income for tax purposes.

You should bear in mind that you may need to keep accounts for reasons unconnected with tax. For example, your bank may want to see your accounts when considering an application for a business loan.

How long must I keep records?

You must keep your records for a period of six years unless your Inspector of Taxes advises you otherwise.

Revenue Examination of Returns, Books and Records

• What is a Revenue Audit?
• How are taxpayers selected for audit?
• What form will the audit take?

What is a Revenue Audit?

A Revenue audit is a cross-check of the information and figures shown by you in your tax returns against those shown in your business records.

Revenue audit covers the following types of tax returns:

• Income Tax, Corporation Tax or Capital Gains Tax returns and/or
• The returns submitted in respect of VAT, PAYE/PRSI or Relevant Contracts Tax (RCT).

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How are taxpayers selected for audit?

Revenue use three methods of selection. These are:

Screening tax returns:

The vast majority of audit cases are selected in this way. Screening involves examining the returns made by a variety of taxpayers and reviewing their tax compliance history. The figures are then analysed in the light of trends and patterns in the particular business or profession and evaluated against other available information.

Projects on business sectors:

From time to time, projects are conducted to examine tax compliance levels in particular trades or professions. The returns for a large number of taxpayers in a particular sector are screened in detail and a proportion of these are selected for audit.

Random selection:

This is in addition to the first two methods. It means that all taxpayers have a possibility of being audited. Each year, a small proportion of audit cases is selected using this method.

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What form will the audit take?

Typically, an audit involves a series of steps, as follows:

• On arrival, the auditor identifies himself or herself to you and explains the purpose of the audit. An indication of the length of time he or she expects to spend on your premises is also given.
• You are given an opportunity to disclose to the auditor any inaccuracies in your tax return
• The auditor will examine your books and records to verify that the figures have been correctly calculated and that the tax returns and/or declarations for the different taxes are correct
• If the auditor finds the returns to be largely correct as is often the case, you will be told so as soon as this becomes clear
• If the auditor finds that adjustments are required, he or she will quantify the adjustments and the additional tax. The details of how the additional tax arises will be discussed with you and you will also be notified in writing
• At the final interview, the auditor will ask for your agreement to the total settlement figure
• Once agreed, the full amount should be paid to the auditor who will issue you with a receipt.

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New EU VAT rules in relation to supplies of telecommunications, broadcasting and e-services (TBE) to consumers (B2C) will come into effect from 1 January 2015. From that date, businesses that make supplies of telecommunications, broadcasting or e-services to consumers in other EU Member States are obliged to register and account for VAT in those Member States. Alternatively, such businesses can now register for the optional special scheme, Mini One Stop Shop (MOSS). The MOSS will allow businesses to submit a single return and payment per calendar quarter for all Member States in which it makes such supplies.

Any eligible business wishing to register for MOSS should do so in advance of 1 January 2015 to avoid having to register for VAT in multiple Member States.

Revenue has published extensive information in relation to these changes during 2014. eBrief Nos. 12/2014, 70/2014, 71/2014, and 79/2014 refer.

The guidance already issued in relation to the Mini One Stop Shop (MOSS) has been updated to clarify the following issues.

Can a business established in Ireland whose turnover is below the VAT registration threshold use MOSS?

The VAT registration thresholds that Member States apply to small business do not apply to businesses that are not established in the Member State.

A business which is established in Ireland but is not obliged to register for VAT in Ireland (because turnover is below the registration threshold) and which supplies telecommunications, broadcasting or e-services to consumers in other Member States will be obliged to register and account for VAT in those Member States or, alternatively, register for MOSS in Ireland.

Such businesses can register for MOSS without any obligation to register for VAT in respect of their supplies to customers in Ireland. When completing the MOSS registration process, the Corporation Tax Number or PPS Number (as appropriate) of the applicant should be provided as an alternative to a VAT number. Any queries in relation to the registration process should be addressed to the MOSS helpdesk.

VAT Groups and MOSS Registration

A VAT Group can register for MOSS. Any member of an existing VAT group can apply to register for MOSS. It is not obligatory that the Group ‘remitter’ is the group member to register for MOSS.

Standard Audit File for MOSS (SAF-MOSS)

The record keeping requirements in relation to MOSS are set out in Chapters 9 and 10 of the Mini One Stop Shop guide. The EU Commission undertook to develop a Standard Audit file for MOSS (SAF-MOSS) with a view to providing certainty for business in relation to record keeping and to facilitate the provision of information to tax administrations. The SAF-MOSS Schema specifications have now been published and business can use this schema for submitting the information requested by Member States in a specified electronic format that is acceptable to most tax administrations. The SAF-MOSS is recommended for business to use but it is not compulsory. If a business does not wish to use the SAF-MOSS to submit information requested by a tax administration, an acceptable alternative format must be agreed at the time of the request.

Information in relation to Member States national VAT rules

From 1 January 2015 the tax treatment of B2C supplies of telecommunications, broadcasting and e-services will be determined by the rules of the Member State of consumption.

The VAT Directive (Council Directive 2006/112/EC) provides common VAT rules for all Member States but it allows Member States to avail of certain options and the interpretation of the VAT Directive may vary in some instances. To assist businesses who will be impacted by the new place of supply rules from 1 January 2015, the EU Commission have developed a portal which provides information on VAT rules in all Member States and is complemented by instructions for use.

Here is an informative guide from Revenue on what tax reliefs and exemptions are available to both start up and existing SMEs.

• Supporting Job Creation and other Enterprise Supports – A Revenue Guide (PDF, 421KB)

CGT relief for disposals of certain land and buildings under section 604A of the Taxes Consolidation Act 1997 – treatment of enhancement expenditure

Section 604A of the Taxes Consolidation Act 1997 (inserted by section 64 of the Finance Act 2012) introduced a capital gains tax relief on disposals of land or buildings acquired in the period commencing on 7 December 2011 and ending on 31 December 2013. Section 44 of the Finance (No. 2) Act 2013 extended the period within which the land or buildings may be acquired for the purposes of the relief to 31 December 2014.

Part 19.07.03a (PDF, 70.7KB) of the IT-CGT-CT Manual, is amended to clarify:

• That the relief applies to the gain on the disposal of land or buildings that were acquired in the period from 7 December 2011 to 31 December 2014 (both dates inclusive).
• That for the purposes of the relief “time of acquisition” and “time of disposal” have their normal meaning by reference to Section 542, TCA 1997.
• That no distinction need be made as between “land” or “buildings” for the purposes of the relief, as any building situated on land is not an asset separate and distinct from the land.
• That enhancement expenditure may be incurred at any time between the date of acquisition and disposal (including expenditure incurred on the construction of buildings on land or the completion of partially built buildings), without affecting entitlement to the relief.

In particular it should be noted that:

Land or buildings will be treated as acquired on or before 31 December 2014 where either

• An unconditional contract has been made on or before that date (and regardless of the fact that the asset may be conveyed or transferred after that date), or
• A contract is made subject to a condition precedent and the condition is satisfied on or before that date.

VAT and Charitable Donations made via SMS Text Message using pre-paid phone credit

The VAT on Telecommunications Services Manual has been updated to clarify Revenue’s position in respect of the VAT treatment of donations to charity made via text message using pre-paid phone credit.

Charitable organisations can receive the full amount of the donation made using pre-paid phone credit without a VAT deduction subject to certain conditions being met. Full details are available in Part 5-47 (PDF, 87KB) of the Manual.

Today’s edition of Iris Oifigiúil contains details of published settlements completed by Revenue in the period 1st July 2014 to 30th September 2014.

In the 3-month period to 30th September 2014, 107 taxpayers fall to be published. The settlements in these cases total€19.64m million.

Of the 107 published cases, 33 were for amounts exceeding €100,000; of which 10 exceeded €500,000, 5 of which exceeded €1m.

9 of the 107 settlements published, yielding €3.89m, relate to Revenue’s investigation into Bogus Non-Resident Accounts and Offshore Assets/Funds.

Click here to see the detailed list of defaulters.

For some this is a timely reminder of how seriously revenue look at the situation of :

-Failure to file tax returns.

-Filing returns which are knowingly incorrect

-Failing to keep proper records, etc.

In situations where a qualifying disclosure of tax defaults, as provided for in legislation, has not been made by a taxpayer, penalties levied range between 15% and 100% depending on the category of default and whether or not the taxpayer has cooperated with Revenue in the course of enquiries.

Penalties are not charged where a tax default was not deliberate, or was not attributable in any way to the failure by a taxpayer to take reasonable care to comply with his or her tax obligations. Neither is a penalty charged where an adjustment to liability arises from differences in the interpretation or the application of legislation, and the taxpayer could reasonably have considered her/his interpretation to be correct.