Advice from Revenue

P

Phil1800

Registered User
Messages
1
Would appreciate some thoughts on this:
I had a "grey area" situation about 10 years ago with regard to whether or not I should declare a particular recurring item as income.
I phoned revenue and explained the situation, and they told me to email the details for consideration, which I did.
I gave all the details, and they subsequently replied (by signed email, not a formal letter) to tell me that I did not need to pay income tax on that source (or declare it as income) and explained why. So I did not include it in returns.
However, I've just been looking at the revenue website (and other online commentaries), and it seems that the advice I was given was wrong, or at least is highly contestable. (I've checked and the policy when I sought the advice was the same then as it is now.)
I no longer have this source of income - it ended a few years ago - but I know that if I was ever audited, and the audit judged it should be treated as income, I would be hit with a significant tax bill for potentially several years worth of it, plus an interest charge which is growing with every passing year. Plus the work of preparing records to suit the new revenue treatment would be very taxing (pardon the pun). It is paralysing my financial decisions for the future as it is in the back of my mind that I might one day need to fund a tax bill, even though I was completely open and honest in my initial query and acted in good faith, and it is only now (when that income source no longer exists) that I have noticed the issue with the advice I received.
I consulted an accountant several years ago, and he wasn't hugely concerned. He certainly didn't recommend making a disclosure.
But, it's there at the back of my mind.
What do you think?
 
Except in the case of fraud or neglect, there is a statutory time limit of 4 years for Revenue to make enquires or raise a Revenue assessment.

In circumstances as you have outlined, you have not been negligent, given that you sought out the Revenue view and acted accordingly - barring any subterfuge / misrepresentation on your part - so as of ten minutes from now, you are in the clear for all years prior to 2015.

While you might be subject to interest on any liabilities arising in 2015 or later, it’s unlikely that any penalty would apply, in the circumstances.
 

I have a similar situation where I received a refund of 2015 capital gains tax after a written email from revenue confirming I had overpaid. I have kept these funds in a separate bank account believing that the advice from revenue was incorrect. just in case I was audited. How far back can audits go?
When would it be safe to spend this money? Thanks
 

Let's say you are eventually audited and Revenue form the opinion that you have underpaid. I understand they can slap penalties on you (8% Interest per annum for a start). I don't know when you can rest easy.
 

Impossible to comment on that situation without knowing more of the facts.

What I will say is that CGT is a self assessment tax, so the assessment you have for 2015 should reflect the return you filed.

If you calculated your tax due and paid it, in advance of filing your return, there should be a reason why your return then resulted in a (self) assessment with a lower liability and a refund.

If your return wasn’t a full and true return then, technically, there’s no time limit.
 
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