The landscape of tax compliance is ever-evolving, and with the aftermath of COVID-19, revenue authorities are shifting their focus to new areas. As we navigate through these changes, it's crucial for taxpayers to stay informed about where the spotlight might turn next.
Naomi Butler took viewers through the three key areas that are likely to see increased scrutiny from revenue authorities: the rental sector, the PAYE (Pay As You Earn) sector, and the world of influencers and content creators.
Rental Income Scrutiny
Revenue authorities have been ramping up their attention on the rental property market. Landlords must be vigilant in ensuring their tax affairs are in order, especially when it comes to declaring rental income accurately. The days of "same as last year" are long gone; with mortgage interest rates fluctuating and maintenance costs varying, it's essential to provide up-to-date and accurate information.
One critical point for landlords to remember is that foreign losses cannot be offset against Irish rental profits, and vice versa. This distinction is crucial for those with international property portfolios. Additionally, with the phasing out of certain loss reliefs, landlords may face higher taxable profits and should prepare accordingly.
For those considering selling their properties, it's important to note that any unresolved tax issues can come back to haunt them during the sales process. Ensuring taxes are up to date is not just a matter of compliance but also a strategic move to avoid future complications.
PAYE Workers Under the Microscope
The PAYE sector has traditionally been seen as straightforward, with taxes deducted at source by employers. However, revenue authorities are now taking a closer look at PAYE workers, particularly following the Temporary Wage Subsidy Scheme (TWSS) and Employment Wage Subsidy Scheme (EWSS) introduced during the pandemic. There's a growing concern that many workers may not fully understand their tax obligations or entitlements, leading to errors in tax returns.
It's become increasingly important for PAYE workers to review their tax affairs, claim any reliefs they're entitled to, and ensure they're not overpaying or underpaying tax. Revenue is keen on recouping funds distributed during COVID-19, and PAYE workers are not exempt from this scrutiny.
Influencers and Content Creators: A New Frontier
The rise of social media has given birth to a new breed of entrepreneurs: influencers and content creators. These individuals often receive gifts, freebies, or payment for promoting products or services. However, there's a misconception among some influencers that these perks fall under gift exemptions for tax purposes.
Revenue authorities are beginning to clarify that these are not mere gifts but rather forms of income that need to be valued and taxed accordingly. For instance, if an influencer receives a free hotel stay in exchange for a review, they must determine the fair market value of that stay and report it as income.
Influencers must also be aware of the long-term financial implications of their work, including the need for proper valuation of services and understanding the tax rules that apply to their unique situations. As this sector grows, so does the likelihood of revenue intervention to ensure compliance.
As we look ahead, it's clear that revenue authorities will continue to adapt their focus areas in response to economic changes and emerging trends. Whether you're a landlord, a PAYE worker, or an influencer, staying informed and proactive in your tax planning is more important than ever. Proper documentation, understanding the rules, and seeking professional advice when necessary can help you remain compliant and avoid penalties.
Remember, the key to navigating these changes is not just about avoiding scrutiny but also about optimising your tax position within the bounds of the law. By keeping abreast of revenue's shifting focus, taxpayers can ensure they're prepared for whatever comes next.
For the full session, please click here. In this course, Naomi Butler looks at recent e-briefs and updates highlighting areas that Revenue are repeatedly seeing errors or mis-filings on and what are the implications for the tax-payers on same.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article. The information at the time of publishing was accurate and could be subject to final changes.