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Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

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Accounts Menus

Consultations, as announced by Revenue, on the scope of the accounts menus for Income Tax and Corporation Tax, are to commence shortly.

These consultations are on foot of the decision by Revenue to remove the upper limit of turnover of €20m beyond which taxpayers could submit accounts along with the Form 11 or CT1, without recourse to the accounts menus. The obligation on all entities and particularly companies, regardless of size, to complete accounts menus could well give rise to additional compliance costs.

The preparation of audited accounts for most companies is a legal requirement. Compliance with this legal requirement, before the advent of the accounts menus system, also resulted in compliance with Revenue requirements – the accounts could be submitted with the CT1. In every instance therefore, the completion of accounts menus constitutes an additional compliance requirement, and contributes to the compliance burden.

This development would appear to be somewhat at odds with current Government policy, as evidenced for example by the work of the Small Business Forum established under the auspices of the Minister for Enterprise, Trade and Employment.

For relatively small businesses, operating under the previous menu thresholds, the completion of the menus might have been straightforward in many instances. This will not be the case for larger organisations.

Furthermore, many larger entities engage accountancy firms other than the firms which conduct their audits to prepare their tax returns. This commercial reality may itself driven by compliance requirements in regard to auditor independence. The resulting division of labour, in the context of extrapolating accounts menu information, will drive the risk element of the engagement for both firms concerned, and hence the compliance costs.

We believe that constructive consultation with Revenue on this important matter should include:

ICAI has also proposed to Revenue through the TALC process that, at a minimum, the introduction of this new mandatory requirement be deferred for at least a year.

We would really appreciate your comments as to what points might be raised during the consultation, and in particular the extent to which your businesses and firms regard this development as problematic.

Please contact Brian Keegan, Director of Taxation, at the Institute (brian.keegan@icai.ie).