Your questions, Paul Dillon, Tax partner; Duignan Carthy O’Neill
I recently returned from Australia. I was working self employed over there and have a tax return due. Can I be chased for it in Ireland? What kind of penalties could I face if caught?
Nuala, Salthill, Co Galway
If you have not filed a tax return in Australia, technically the Australian authorities can seek assistance from the Irish Revenue Commissioners to enforce the debt. Ireland and Australia have signed a tax treaty and this tax treaty has provisions including mutual assistance to deal with tax disputes.
Both countries also have a provision allowing the exchange of information. The Australian tax authorities can therefore ask Irish Revenue for assistance in collection of debts owed to them.
If a person returns to Ireland, it is also possible, based on residency rules, that the income earned before returning to Ireland could technically be taxable in Ireland (with credit for any Australian tax paid).
I am self-employed and use my car for work about a fifth of the time. What car expenses can I claim tax relief on? Can I write the cost of my road tax, insurance and petrol off my tax bill?
Gary, Raheny, Dublin 5
If you are self-employed and use your car for work for a fifth of the time, you will be entitled to a tax deduction for one-fifth of the cost of running the car - where this represents a legitimate business expense. All costs including road tax, insurance, petrol and maintenance, can be taken into account when calculating the amount allowable for tax purposes.
Capital allowances may be claimed on the car over eight years at a rate of 12.5pc per annum. This will also be restricted to the percentage use of the car for work purposes.
I am 66 years old and therefore entitled to tax-free interest on my savings. However, on my recent credit union savings statement, I noticed that DIRT had been deducted from my savings. How do I stop this happening - and can I claim a refund for the DIRT that has been deducted since I turned 65? If I can claim a refund, how would I go about doing so?
Thomas, Kinsale, Co Cork
To receive your interest tax free, you need to apply to the financial institution directly (using the Form DE1).
In order to be entitled to the exemption, your total income needs to be below the current limit. In 2015, this limit is €18,000 for a single, widowed or surviving civil partner and €36,000 for a married person or a person in a civil partnership.
The exemption limit is increased where you have dependent children.
If your circumstances change and you are no longer entitled to the exemption, you need to inform the financial institution, in order that they can operate DIRT going forward
If you are entitled to a refund of DIRT, you can apply directly to Revenue using Form 54.
I am self-employed and have just received a letter from the Revenue Commissioners informing me that I am about to be audited. What exactly is a Revenue audit, how far back can Revenue delve into my tax affairs -and how should I prepare for this audit?
Niamh, Ennis, Co Clare
A Revenue audit is a review of tax returns, books and records for accuracy and validity.
It can normally cover any period within the previous four years from when your latest tax return has been filed. However, the audit can go back further than this if Revenue has reasonable grounds to believe that a return filed does not contain "a full and true disclosure".
The letter you have just received from Revenue should tell you the details of the taxes and years to be covered by the audit - and the date and time of the audit.
You should meet your accountant or agent before the audit takes place. The main points which you should cover during those meetings include any problem areas in respect of the taxes to be reviewed during the course of the audit. This would include areas where back-up documentation may be required for a particular claim or where there are specific issues which you are aware of where taxes may be incorrectly operated, such as unvouched expenses. Your meetings should also identify queries and information which may arise during the course of the audit.
Another important decision to be made is where to accommodate the Revenue officials during the course of the audit. The Revenue audit code is very specific in stating that Revenue's preference is to carry out the Revenue audit at the client's premises. It is important that Revenue is accommodated in suitable offices in a way which avoids disruption to your business and customers.
A 'dry run' of the information to be audited should be conducted in advance to ensure that no problem areas remain before the audit.
Be sure to familiarise yourself with the code of practice for Revenue audits as this will give you an idea of what to expect from the audit. This code will help you understand your rights and responsibilities as a taxpayer in the context of the audit - as well as the powers Revenue may use during the course of the audit.
Where an underpayment of tax is identified, you should consider making what is termed as a 'prompted qualifying disclosure' to Revenue at the opening audit meeting.
A qualifying disclosure is where an individual goes voluntarily forward to Revenue in advance of an audit and discloses the underpayment of tax. A Revenue official will usually ask you if you wish to make a disclosure at the opening audit meeting. If more time is needed to make the disclosure, an extension of 60 days can be sought in advance of the commencement of the audit.
One of the main advantages of making a prompted qualifying disclosure is that you will face significantly less penalties than would be the case if you didn't make the disclosure. You will also avoid having your name published in a list of tax defaulters - regardless of the size of the settlement.
Email your questions to firstname.lastname@example.org or write to 'Your Questions, The Sunday Independent Business Section, 27-32 Talbot Street, Dublin 1'.
While we will endeavour to place your questions with the most appropriate expert to answer your query, this column is a reader service and is not intended to replace professional advice.
Tax partner, Duignan Carthy O'Neill
Sunday Indo Business