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Saturday 24 March 2018

Charlie Weston: Revenue letter scare tactics are a needless worry for most of us

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Charlie Weston

Charlie Weston

Officials working in the Revenue Commissioners have an unrivalled capacity to scare the living daylights out of people.

Tax officials have sent letters to 500,000 taxpayers warning them that they are running out of time to declare if they have foreign earnings that they have failed to declare.

The warning relates to a bank account abroad or a pension from outside the State that people are not paying tax on.

Revenue is set to get access to records held on Irish-based taxpayers by tax authorities in other countries.

The move comes after Finance Minister Michael Noonan announced in October's Budget a move to target offshore income and assets which have not been declared to Revenue.

Mainly targeted at large-scale tax evaders, the clampdown is also likely to impact anyone with a bank account in another country or a property that is being rented out, even for part of the year.

It will also apply to those who have a pension from abroad, especially the UK, but do not pay tax on it here.

Revenue said taxpayers are being advised that from May 1 changes are coming into effect for anyone filing a "qualifying disclosure" that relates to offshore matters.

This relates to a tax liability or omission in a previous filing. It can concern property, funds or accounts held abroad.

Changes in the 2016 Finance Act mean the qualifying disclosure option will not be available for people who have failed to declare offshore assets by April 30.

Severe penalties will apply to taxpayers who have not declared or have under-declared their offshore income and assets to Revenue by the end of April.

However, just because a taxpayer receives this letter does not necessarily mean Revenue thinks you have any "offshore" assets or other issues, according to advisory services manager of accountancy body ACCA Ireland, Aidan Clifford.

But for many people, receiving a brown envelope with a harp on it is traumatic. Many taxpayers, especially elderly taxpayers, will be worried by this correspondence.

For those who are tax compliant there is nothing to worry about.

Anyway, it could be that this trawling exercise by Revenue will prove to be an anti-climax.

Only 15 taxpayers have approached Revenue to declare offshore assets since Noonan announced the new hard-line approach on offshore tax evasion last October.

Consult a financial adviser if you are unsure of what to do.

Sunday Indo Business

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