Revenue Operational Manual Compliance Programme for Agent Services representing PAYE Taxpayers

Transcription

1 Compliance Programme for Agent Services representing PAYE Taxpayers 1

2 Contents 1. Introduction Summary of Changes to Arrangements Updated Revised Arrangements Compliance Programme Appendix 1 Requirements Appendix 2 Taxable Sources of Income...8 2

3 1. Introduction In recent years there has been an increase in the number of service providers offering to assist PAYE taxpayers review their tax liabilities and tax credits. Initially, a temporary approval system was operated by Revenue whereby a small number of agents were authorised to receive PAYE refunds directly to the agent s bank account. This temporary approval system ceased on 14th October 2012, and new arrangements came into effect from 15th October With effect from 01, these arrangements have been revised and updated to include details on the following: Requirements for the retention of documents, The provision of a client s personal address when using PAYE Anytime, The use of electronic signatures, and The nature of supporting documentation required to verify taxable sources of income. 2. Summary of Changes to Arrangements Retention of Documents Agents are required to obtain documentary evidence from clients in respect of claims for credits and reliefs they submit to Revenue on their client s behalf. Previously agents were required to retain scanned or hard copies of these documents for a period of six years. The updated arrangements outline that agents are required to request documentary evidence of taxable sources of income and entitlement to credits and reliefs in respect of claims that they submit to Revenue. All documentary evidence must be retained by the agent for a period of six years beginning at the end of the year of assessment to which the Return of Income and/or claim relates. Alternatively, the documentation can be retained by the client if agreement to do so has been reached between the client and their agent. Provision of Client s Personal Address in PAYE Anytime The provision of a client s personal address is mandatory when accessing PAYE Anytime for the first time for that client; under no circumstances should an agent s address or a fictitious address be used. Update to PAYE A1/A2 Mandates The PAYE A1 and PAYE A2 Mandates have been revised to reflect the changes in relation to retention of documents and the provision of a client s personal address. 3

4 Use of Electronic Signatures Agents must retain either a physical copy, or a scanned copy, of the signed mandate. An electronic signature is acceptable once it conforms to the Electronic Commerce Act, As is the case with written signatures, where an electronic signature is used, agents should satisfy themselves that the signature is that of the actual client. In addition, the digital signature must be capable of being regarded and used as the legal equivalent of a written signature. Details of Relevant Sources of Taxable Income In order to assist with the requirement that a client must provide details of all sources of income to an agent acting on their behalf, a list of taxable sources of income along with the documentation needed to verify these sources of income is set out in the appendices of this document. 3. Updated Revised Arrangements The updated revised arrangements for PAYE Tax Agency Services apply to all agents who have a Tax Advisor Identification Number (TAIN) and his/her clients who are PAYE taxpayers. The updated revised arrangements are based on the following control framework: 1. A Revenue Mandate ( PAYE A1 ) must be completed by a taxpayer authorising an agent to act on his/her behalf. Using the e-registration facility on ROS, agents will then have to create a new link to their client by uploading the mandate. 2. An alternative Revenue Mandate ( PAYE A2) will be required where a taxpayer authorises the payment of a refund directly to an agent s account. Note: An agent may use his/her own PAYE A1/A2 Mandate providing it includes all the same wording/information included on the Revenue forms. 3. The PAYE A1/PAYE A2 Revenue Mandates include: (i) (ii) (iii) A requirement that all available documentary material relating to credit claims must be provided to the agent. Details regarding documentation and information required are set out in Appendix 1 below; A requirement that details of all sources of income must be provided to the agent. A list of taxable sources of income and the documentation needed to verify these sources of income is set in Appendix 2 below; A reference to the civil and criminal penalty provisions for making false claims. 4

5 4. Agents must retain either a physical copy, or a scanned copy, of the signed mandate. An electronic signature is acceptable once it is created in line with the technological and proof of authenticity conditions set out in the Electronic Commerce Act, An electronic signature is acceptable only if it is created by using a secure signature creation device or technology based on a qualified certificate that has been provided by an accredited certification service provider. The electronic signature created must be; a) uniquely linked to the signatory, b) capable of identifying the signatory, c) created using means that are capable of being maintained by the signatory under his/her sole control, and d) linked to the data to which it relates in such a manner that any subsequent change of the data is detectable. As with written signatures, in all instances where an electronic signature is used, agents should satisfy themselves that the signature is that of the actual client. The digital signature must be capable of being regarded and used as the legal equivalent of a written signature. 5. Compliance activities will involve verification checks by Revenue on a taxpayer s Return of Income and/or refund claims (pre or post refund). This is part of a broader PAYE Compliance Programme for all PAYE tax refund claims irrespective of whether such claims are submitted directly by a taxpayer or through an agent. 6. Compliance checks on an agent s adherence to the revised arrangements will be carried out by the Revenue office where the agent has his/her main business address. Processing and verification (pre and post refund) of claims will usually be carried out by the Revenue office where the PAYE customer resides. 7. Agents are required to request documentary evidence of taxable sources of income and entitlement to credits and reliefs in respect of claims that they submit to Revenue. The documentation must be retained by the agent (or alternatively by the client if so agreed between the client and agent) for a period of 6 years beginning at the end of the year of assessment to which the Return of Income and/or claim relates. 8. Where Revenue is satisfied that an agent is fully compliant with the revised arrangements, the number of compliance checks conducted will be reviewed and adjusted. 9. Agents must use the PAYE Anytime service or the e-form 12, accessible through the agent s ROS Digital Certificate, to conduct their business to the extent that the electronic service covers the transactions. The e-form 12 allows agents to make a Return of Income (but not of capital gains), claim all tax credits, allowances and reliefs (including any health expenses) on behalf of clients electronically for the tax years 2013 and The provision of a client s personal address is mandatory when accessing PAYE Anytime for the first time for that client; under no circumstances should an agent s address or a fictitious address be used. 5

6 11. Agents are not permitted to select the e-output option on PAYE Anytime. This will ensure that the client receives copies of all correspondence in relation to their PAYE tax affairs issued by Revenue. This condition must be strictly adhered to. 4. Compliance Programme A co-ordinated Compliance Programme for PAYE Tax Agency Services has been in operation since January The compliance checks that need to be carried out can be categorised as follows: (i) Verification checks on a taxpayer s Return of Income and/or refund claims (pre or post refund), (ii) Holistic checks on agent s adherence with revised arrangements. The taxpayer s Revenue office will usually be responsible for checks in category (i) above and the Revenue office where the agent has his/her main business address will be responsible for checks outlined in category (ii). In the circumstance where an agent has more than one place of business, the Revenue office which has primary responsibility for the agent s affairs should undertake the category (ii) agent s compliance check. Although this approach differs from the approach published in October 2012, it is a more pragmatic option, which will be less demanding in terms of time and resources and will impose the least inconvenience on the PAYE agent. The following material is either exempt from or not required to be published under the Freedom of Information Act [ ] 5. Appendix 1 Requirements PAYE Credits Health Expenses 1. Copy of receipts or annual statements issued by Consultant/Nursing Home/Doctors/ pharmacy or qualified practitioners to vouch claim. 2. Copy of doctor s referral note for claims for relief on physiotherapy expenses. 6

7 PAYE Credits Non-routine Dental Expenses Rent Credit One-Parent Family Tax Credit (to 2013) Single Person Child Carer Credit (from 2014) Home Carer Credit Tuition fees BES/EII Medical Insurance Credit (Paid as BIK by employer) 3. Details of any/all reimbursements received. Copy of Form Med 2 signed by the dentist. Ask questions as per the form Rent 1 (Rented Property and Landlords details) Ask questions per OP1 form to ensure: 1. The client is a single parent and a qualifying child resides with them for all or part of the year or is a person who has custody of and maintains a qualifying child who resides with them for all or part of the year. 2. The client is not jointly assessed to tax as a married person or a civil partner. 3. The client is not living with a spouse or civil partner. 4. The client is not co-habiting. 5. The client has not been widowed or became a surviving civil partner in the year for which they are making this claim and is not in receipt of the basic personal tax credit to which they are entitled as a result of their bereavement in that year. Ask questions as per SPCC1 or SPCC2 to ensure: 1. The client, if a Primary Claimant, is a single person and a qualifying child resides with them for all or part of the year or is a person who has custody of and maintains a qualifying child who resides with them for all or part of the year. 2. The client, if a Secondary Claimant, is a single person and a qualifying child resides with them for at least 100 days in the year and the Primary Claimant has relinquished the credit in their favour. 3. The client is not jointly assessed to tax as a married person or a civil partner. 4. The client is not living with a spouse or civil partner. 5. The client is not cohabiting. 6. The client has not been widowed or became a surviving civil partner in the year for which they are making this claim and is not in receipt of the basic personal tax credit to which they are entitled as a result of their bereavement in that year. Ask questions as per Revenue s claim form. Ensure that the home carer s income does not exceed threshold. 1. Copy of receipt issued by the college/university. 2. Details of the course(s) studied. Certificate of investment. Any one of the following types of evidence: 1. Letter or from employer stating gross amount paid as BIK on behalf of client, 2. A payslip from employer which clearly indicates the taxable medical insurance benefit-in-kind amount, 3. Any employment document such as a contract of employment showing evidence that the employee s medical insurance is paid by his/her employer, 7

8 PAYE Credits Dependant Relative Credit Employing Carer to care for Incapacitated Relative Incapacitated Child Credit 4. A letter or from the health insurer confirming that the individual is on a company scheme where the premium is paid by the employer. Ask client questions as per claim Form DR1 and DR2. 1. Ask client questions as per form HK1. 2. Request copy of receipt of payments made to an agency. 3. Ask client to provide copy of doctor s certificate in certain circumstances. 1. Ask questions as per Revenue s claim form. 2. Ask client to provide signed declaration by a medical practitioner regarding details of incapacity, as per Revenue s claim form. Film Relief Provide original certificate FILM 3. Seafarer Allowance Blind Credit Letter from employer supporting the claim. Statement from Ophthalmic surgeon. If claiming for a Guide Dog a letter from the Irish Guide Dog Association confirming the registered owner of the dog. Revenue Job Assist Form RJA 1 part 1 completed by employee and Part 11 by employer. Pensions Contributions, PRSA etc. Permanent Health/ Income Continuance Trans Border Worker Flat Rate Expenses Bin Charges (prior year claims) Evidence of contributions made. Evidence of contributions made and verification from employer that relief not allowed at source. 1. Written Claim. 2. Final statement of Income Tax liability from other country. Query job description Verbal confirmation of amount. 6. Appendix 2 Taxable Sources of Income Income Source Employments Subject to PAYE Form P60/Form P45(3) is required where employment pay and tax information is not available or displayed on ROS 8

9 Income Source Pensions/Annuities Subject to PAYE Rental Income from Land and/or property in the State Foreign State Welfare Pension or Payment Foreign Pensions Form P60/Form P45(3) is required where employment pay and tax information is not available or displayed on ROS Full Rental Income Computation Mortgage Interest Certificates from Financial Institution Confirmation of PRTB Registration Receipts for legitimate property related expenses claimed Statement from Foreign State Welfare Body confirming gross payment received. To ensure accurate details of the income are provided to Revenue it may be necessary to translate the documentation into English. The translation need not be certified once you are satisfied that the correct information is being provided. End of year Statement from Pension provider. To ensure accurate details of the income are provided to Revenue it may be necessary to translate the documentation into English. The translation need not be certified once you are satisfied that the correct information is being provided. Income from a Trade or Profession Lump Sum(s) from Relevant Pensions Arrangements (S. 790AA) Irish Deposit Interest Untaxed Income Arising in the State Irish Government Stocks Irish Exchequer Bills Irish Credit Unions Dividends Other Investments Description of trading or professional income Full set of accounts Receipts/documentation in relation to capital allowances and/or other expenses claimed Form F45 where credit for PSWT claimed Statement from Retirement Fund Certificate of Interest from Financial Institution Statement from Investment Broker Statement from Investment Broker Dividend Statement from Credit Union 9

10 Income Source Great Britain & Northern Ireland Dividends Employments /Offices/Pensions not subject to PAYE deductions Irish Dividends Income from Foreign Employments attributable to the performance outside the State of such employments Statement from Investment Broker Dividend counterfoil receipt or end of year statement from Fund Manager Letter from employer/pension provider confirming payment amount Dividend counterfoil receipt or end of year statement from Fund Manager End of year statement from Foreign Employer. To ensure accurate details of the income are provided to Revenue it may be necessary to translate the documentation into English. The translation need not be certified once you are satisfied that the correct information is being provided. Any other Foreign Income US Dividend Fees, Commissions etc. from sources other than employments or directorships EU Deposit Interest Canadian Dividends Income from which Irish tax was deducted Annuities Covenant Statement/Proof of payments received. To ensure accurate details of the income are provided to Revenue it may be necessary to translate the documentation into English. The translation need not be certified once you are satisfied that the correct information is being provided. Dividend counterfoil receipt or end of year statement from Fund Manager Description of Income Statement of payment amount received Certificate of Interest from Financial Institution Dividend counterfoil receipt or end of year statement from Fund Manager Statement from Pension/Insurance Provider Covenantee (person receiving covenant) o Deed of Covenant 10

11 Income Source Settlements Legally Enforceable Maintenance Estate Royalties Patent Royalty Income Great Britain & Northern Ireland Dividends Claim Form o Completed R185 o Form 54 Claims Covenantor (person paying covenant) o Copy of Original Deed Copy of Settlement Agreement Copy of Deed of Separation Statement/Proof of Payments Received Statement/Proof of Payments Received Dividend counterfoil receipt or end of year statement from Fund Manager Foreign Rental Income Full Rental Income Computation Receipts for legitimate property related expenses claimed Mortgage Interest Certificate from Financial Institution (if applicable) Payments received under a legally Enforceable Maintenance Arrangement from which Irish Tax was not deducted (excluding any amounts in respect of children) To ensure accurate details of the income are provided to Revenue it may be necessary to translate the documentation into English. The translation need not be certified once you are satisfied that the correct information is being provided. Copy of the Deed of Separation Rent Paid to Non-Resident Landlord Name & Address of Landlord Details of Bank Account into which rent is paid Details of Rent Paid Deduction of income tax at the standard rate of tax from gross rents payable Withdrawal of Funds from AVC Distributions from Approved Retirement Funds, Approved Minimum Retirement Funds & PRSA Other Payments such as Payments received on commencement of employment Payments received in consideration of Statement from Retirement Fund Statement from Retirement Fund Statement from Employer confirming payment received Statement from Employer 11

12 Income Source change in conditions of employment confirming payment received Lump sum payments paid on Redundancy/Retirement Non-Deposit Interest/Annuities/Royalties/Dividends Benefits from Employments/Offices/Pensions not taxed at source Payments from Department of Social Protection(DSP) State Contributory Pension State Non-Contributory Pension Illness benefit Occupational Injury Benefit Invalidity Pension Jobseekers Benefit Carer s Allowance Carer s Benefit Survivors Pension One Parent Family Payment State Pension Transitional Pre-Retirement Allowance Maternity Benefit Adoptive Benefit Health & Safety Benefit Any other payment from DSP not listed above Form P45(3) Application for Increased Exemption if not already granted by employer Statement/Proof of payments received Statement from Employer/pension provider confirming payment received Verbal confirmation of: Date of first payment if payment was received for the first time in the year for which a claim is being submitted Amount of Payment Date payment ceased (if applicable) You should be satisfied that the information provided by your client is correct and broadly in line with the standard payment rate for the particular payment being received. For more information on rates of DSP payments please visit Verbal confirmation of: Name of Payment Date of first payment Amount of Payment Date payment ceased (if applicable) You should be satisfied that the information provided by your client is correct and broadly in line with the standard payment rate for the particular payment being received. For more information on rates of DSP payments please visit 12

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