PAYE workers to be targeted after tax take dries up
THE Revenue Commissioners are planning to use their hi-tech tax profiling system on 2.2 million ordinary PAYE taxpayers as the tax take from wealthier people dries up.
The Revenue are now looking at using the system on those with second businesses or "nixers", or those who've made large purchases which appear unusual considering their income.
The REAP system (known officially as risk evaluation, analysis and profiling) has to date been used on companies and the self-employed. It pieces together disparate pieces of information, some of it from third parties, and then pinpoints those who need to be audited or hit with a tax claim.
The depth of the recession has reduced the annual tax take to 2003 levels as capital gains tax, stamp duty and even VAT have dried up. In answers to questions from the Data Protection Commissioner, the Revenue admitted it was now time to change how the REAP system was used.
"Given the present economic climate . . . the use of REAP may be extended to evaluate risk across the PAYE sector. This would involve REAP examining some 2.2 million cases."
The Revenue would track anyone with assets beyond their family home. For example, if someone sold something that triggered capital gains tax, that would prompt an audit or request for extra information.
"Such persons may be liable for additional tax liabilities," a spokesperson said.
The REAP system, essentially a computer programme, first came into operation in 2007 and is only accessible to senior tax inspectors with a password. All four Dublin regions are allowed to access the system.
Taxpayers examined under the system are given a score which shows the level of risk they may owe the revenue additional money. Those with higher scores are given priority for audit or a tax claim.
On Tuesday, the Department of Finance revealed the tax take for 2009 came to €33bn, down 20pc on the previous year. All tax areas shrank in 2009, with capital gains tax the worst faller with a 62pc plunge in returns. The area which fell the least was income tax which dropped by 10.2pc, after the Government implemented a series of income levies.
Recently the Irish Independent revealed that revenue officials were cracking down on people offering piano lessons, grinds and other "nixers" to ensure tax is being paid.
Inspectors are scouring noticeboards at shops and taking down details of people advertising services.
The actions are part of a Revenue campaign to ensure we do not return to 1980s-style tax evasion.