Letter from Revenue re addbacks/adjustments - help required

C

clonjess

Registered User
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Hi, my boyfriend just received a letter from revenue re his tax returns for 2006 to 2008 saying that there were no provisions for addbacks/adjustments and kindly state the reason or send them any computations. He is a contractor and the only addbacks/adjustments he had were deprectation and capital allowances and they are both included on the CT1's. Can anyone help me as to what I should do here? Does this mean he is getting a revenue audit?? Any help would be greatly appreciated...thanks..
 
No personal use of a company vehicle, or light & heat, or telephone? Those are some of the most common addbacks...

It's not an audit at this point as they are only asking for clarification, but if they aren't satisfied with the explanations given, then an audit may result...
 
Thanks mandelbrot - no to the vehicle and light and heat and the ltd. company pays the phone bills - should there be an addback for phone in your opinion?? - the only ones i had included were deprec and capital allowances...should i just explain that these are the only 2 and give them a comp of the depre and cap allow and hope that this satisfies them??/ last thing we need is a revenue audit!
 
Yes there should be an addback for all non business expenses. Correct it now and hopefully nothing more will come of it. However, you are now at a very high risk of a Revenue audit.
 
Paddy199 said:
Yes there should be an addback for all non business expenses.
Click to expand...

...only if non-business items are claimed as deductions in the first instance. (The OP states that they haven't done so.) Revenue misunderstandings in this area are quite common.
 
Paddy199 said:
However, you are now at a very high risk of a Revenue audit.
Click to expand...

Not necessarily. It's likely that the district tax office are carrying out an exercise, based on cases where there have been no addbacks, which would surely be an identified risk in revenue's systems. Whether or not an audit is opened will depend on the answers given at this stage, as well as any other risks/information identified in the particular case, relative to the other cases being queried, which could be dozens.
 
T McGibney - in the second post they say that the company pays for phone bills and no adjustment was made. There should have being an addback for this.

Mandelbrot - I took the OP post to mean subcontractor in the construction sector who are already at a higher risk of Revenue audit. Having to make amendments based on a Revenue prompt does increase this risk further.
 
For the phone - is this an addback re personal use? what if it is all for business use?? if i was to send a comp with an amendment for phone, would this prompt Revenue to investigate the returns further??? I really dont want to jeporadise my boyfriend to a Revenue audit! thanks again for all your replies
 
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