Revenue review of tax affairs of medical consultants

Revenue is reviewing the tax affairs of medical consultants with a particular focus on consultants that have transferred his/her business to a limited company (owned or part owned by the consultant).  The Irish Tax Institute has said that the review is in the Dublin region, however, a letter from Revenue states it is being extended nationally.

The same letter states that Revenue will challenge transactions that have little or no commercial reality.  It goes on to list examples of the types of issues it has identfied:

  1. Inflated or unrealistic value of goodwill
  2. Use of capital losses or retirement relief to reduce capital gains on the transfer of the business to the company
  3. Confusion between when then consultant acted in his/her own name or as an employee of the company
  4. Agressive policy on deferral of income
  5. Insufficient supporting documentation for expenses and some cases of expenditure that is not relevant to the business

Revenue’s review will commence with writing to tax payers asking them to “self-review”.  This means the tax payer can review the situation themselves (and with their tax adviser) to determine if any additional tax is due.  This self-review would be classed as an unpromted qualifying disclosure meaning the tax payer can avail of mitigated penalties.  If Revenue is not satisfied with the response it may proceed to full Revenue Audit.

A copy of the letter can be read here.


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