Revenue published a Tax Briefing (Issue 04 of 2013) which sets out their treatment of expenses and the procedures which they are adopting under the Revenue’s Contractor’s Project. As stated previously in tax.point, the main issue under this Project remains the claiming of expenses.

Tax Briefing Issue 04 follows Tax Briefing Issue 03 of 2013, “Reimbursement of Travel and Subsistence Expenses by Intermediaries”, which covered Revenue’s position on the circumstances in which expenses of travel and subsistence may be reimbursed free of tax where the services of an individual are provided through an intermediary to an end-user.

This Tax Briefing apparently seeks to clarify a number of points made in Tax Briefing Issue 03 and deal with a number of related issues under the Revenue’s Contractors Project. Among the points Revenue make are:

• The arrangements which are the subject of Tax Briefing Issue 03 are those where the end-user is acquiring the services of a specific individual who will work under the general direction and control of the end-user.
• Revenue restate their view that, in such arrangements, the cost of travel to and from home may not be reimbursed free of tax.
• The focus of the Project is the “intermediary company” and the individual and a four year period 2008 – 2011. If necessary the scope may be extended to directors.
• Where the treatment of expenses was specifically raised during an earlier audit, Revenue will consider accepting any subsequent adjustment as a Technical Adjustment, without penalty. In calculating the tax underpayment Revenue will not seek to “re-gross” expenses.
• Revenue’s view is that deliberate behaviour category of default applies to cases under the Project however; the circumstances of each case will inform the level of penalties being applied.

The full text of Tax Briefing Issue 04 is reproduced here.