Revenue’s annual report for 2011 was published yesterday.  

Some key points of interest in the annual report are:

1. Audit and Compliance Activity
  • Last year Revenue increased the level of their audit and assurance activity by almost 20% with the resulting yield increasing by nearly €30 million.
  • E-audit training was integrated into Revenue’s mainstream audit training programme in 2011.
  • A Real Time Risk Model for PAYE was introduced last July. A model for VAT is to be introduced in 2012.
2. Debt Management
  • Revenue staff deployed on debt collection and recovery increased by 11.5% in 2011.
  • Approximately 16,000 cases have an agreed phased payment plan in place covering €113 million in tax debt.
  • Finance Act 2011 provided for an extension of the power of attachment to wages.  To date there are 3 such attachments in place.
3. Other Points of Interest
  • 110 Protective Notifications under Section 811A TCA 1997 were received in 2011
  • The number of schemes under challenge “for tax avoidance” as at 31 December 2011 stood at 50.
  • 74 internal/external reviews were finalised in 2011: in 55 of these reviews Revenue’s decision was upheld.

The report and related press release are available on Revenue’s website here


Chartered Accountants Ireland Commentary

By far the most remarkable aspect of the Revenue Annual Report for 2011 was just how much tax was actually collected.

2011 was a year of severe test for the integrity of the tax system.  The budget for 2011 saw the introduction of the Universal Social Charge and the biggest increases in the tax burden for many years.  A faltering domestic economy ensured that the projected figures at Budget time were not fully met.  But tax yields overall were substantially ahead while at the same time compliance levels remained high.

Revenue may highlight their falling staff numbers, but their Report illustrates a decrease in data handling requirement by Revenue for its taxpaying base.  In the key resource intensive areas of the direct taxes and VAT, it is clear from Revenue statistics that electronic filing is now the norm.  Mandatory electronic filing has also resulted in the vast bulk of payments now being made to Revenue electronically.  We live in an age when the count of visits to the Revenue website constitutes a “Key Result”.

Unfortunately, due to the recession, the volume of business has dropped for all of us.  The amount of correspondence which Revenue handled has dropped by almost 6%.  The collapse of the Construction Industry is especially stark.  In 2011, Revenue had to deal with one third fewer RCT returns, and for every 4 C2’s issued in 2010, only one was issued in 2011.

Despite more processing being done by taxpayers and their agents themselves via ROS, and the lower volumes of business overall, Revenue Customer Service Standard statistics by their own measure deteriorated between 2010 and 2011.  Generally speaking, turnaround times on returns, declarations and applications were not as good in 2011 as in 2010, with only applications for Tax Clearance Certificates bucking this trend.