Prompted Disclosure - need some help

When making a prompted disclosure a person needs to look at the money made from a side business/nixer. They then apply the tax rate to that and the interest rate as I understand it. Could I ask you kind people for help with this and you can assume the person involved here is earning over 100k in a PAYE job so is taxed at the highest level.

Say the person had 110k undeclared in 2019, how would the tax and interest be calculated on that today in a disclosure
What if it was 50k on 2020?

Please no judgement, just looking for a little help to put this right.

52% tax and then interest from the date when the tax was due which ends up being the preliminary tax payment date for Year 2 onwards.

So 2019 numbers would have been due in 2020, so I apply 8% on the tax due for 2 years?

Not 4 years if the tax was due in 2020?

Neilc78 said:

So 2019 numbers would have been due in 2020, so I apply 8% on the tax due for 2 years?

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If the income started in 2019, the tax was due on 31 October 2020 so that’s the start date. But the 2020 tax was also due then (preliminary tax) with the 2021 tax due in October 2021 and so on. You apply the daily rate which you can get online. I think it’s 0.0219% from memory.

Gordon Gekko said:

If the income started in 2019, the tax was due on 31 October 2020 so that’s the start date. But the 2020 tax was also due then (preliminary tax) with the 2021 tax due in October 2021 and so on. You apply the daily rate which you can get online. I think it’s 0.0219% from memory.

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But for the purpose of a disclosure the date 2019 became "late" was 31st Oct 2020.
The date 2020 became late was 31st October 2021 and so on.

Is that correct?

Then at the other side, does that day counter only stop on the date that tax is paid, ie 29th April 2024 if paid today?

Is a 'prompted disclosure' also called a 'qualifying disclosure' if yes then there is this information:


OP have revenue audited you? Do you not have an accountant? I really think you should for that amount of undisclosed income over quite a time span. I'd also be amazed if revenue did not go back prior to 2019.

I received a level 1 compliance audit request for 21 and 22. The issue goes back to 2019 so I want to include everything in my disclosure. I did have an accountant, i sent them all my paperwork. They did nothing it seems for 3 weeks. They then contacted revenue for a 2 week extension. with 3 days left on that extension, at 5pm last Friday they contacted me and said they weren't in a position to work on this for me. So they left me with 3 days to sort this out myself. Hence the questions. I am really just struggling on how to calculate the interest owed as that needs to go into the letter. It is also impossible to contact the person that sent me the letter in the 1st place as the phone in that office is never answered.

I wouldn't worry about having the exact amount of the late interest - when you file corrective returns, Revenue will calculate it and let you know

Just make a reasonable guess, sorry, estimate, of the amount due and the interest is 8% per annum - don't forget to add-on the PRSI and USC

The tax for 2019 was due on 31st oct 2020
Preliminary tax for 2020 was due 31st Oct 2020 - the balance was due 31st Oct 2021
Preliminary tax for 2021 was due 31st Oct 2021 - the balance was due 31st Oct 2022
Preliminary tax for 2022 was due 31st Oct 2022 - the balance was due 31st Oct 2023
Preliminary tax for 2023 was due 31st Oct 2023 - the balance is due 31st Oct 2024

Thanks JPD. I suppose that makes sense.

Can I ask, in terms of off-setting the damage. The only real expenses I have in what I was doing was travel. I can estimate the amount of km travelled but I have no receipts or proof that I did those. I am not sure what to do with this. One person told me to include a modest amount and another told me that putting it in might just irk the guy reviewing it and cause me more issues. What do you think? Is this something that you end up going over and back with revenue on?

Surely if the expense for travel is real you put in a reasonable amount.

Was your accountant with you all along? Very odd to drop you after already conducting communication with revenue. Unless there is something you haven't told us.

Can you not communicate with revenue by email? Or online in their website. I was able to contract revenue for LPT via the online system and they even gave me their phone no.

Are you registered for Income tax ? If so, then contact them thru that by email using the correct links. Otherwise you need to call them in the morning time during the week.

Neilc78 said:

Say the person had 110k undeclared in 2019, how would the tax and interest be calculated on that today in a disclosure
What if it was 50k on 2020?

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If these figures are indicative of the underlying problem here, it would be most foolhardy to rely on Revenue for advice on a qualifying disclosure. If it were me, I'd be rushing to engage a leading tax consultant.

If that is the case, I'm not surprised the accountant you hired didn't apparently want to see it through. A prompted disclosure on this scale would be high stakes stuff both for them and for you.

At this financial level, it’s insanity to be fluting around on the internet or contacting Revenue for guidance. Engage with a decent sized tax firm and get professional assistance ASAP.

Gordon Gekko said:

At this financial level, it’s insanity to be fluting around on the internet or contacting Revenue for guidance. Engage with a decent sized tax firm and get professional assistance ASAP.

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This +1

The only contact you may need to make with Revenue yourself, is if you still haven't engaged a new advisor, to explain that you've had issue with the tax advisor you had engaged letting you down, and need additional time to make a qualifying disclosure.

The importance of retaining the benefit of a "qualifying" disclosure cannot be overstated - based on the amount involved, if you don't make a qualifying disclosure, you will find yourself on the quarterly list of tax defaulters, which could impact on your business / career, depending on what field you work in.

Additionally, and possibly more importantly to you (depending on how you would feel about your name and address being published in your local newspaper as a tax defaulter), is the substantial difference in the amount of penalties you would be subject to.

You have said above that the current level of intervention is a Level 1 intervention - if this is correct then you can still make an Unprompted Qualifying Disclosure, which would mean penalties in the range of 5% - 10%, compared to 20% - 50% if you're making a Prompted Qualifying Disclosure (which would be the case if Revenue have notified you of a Level 2/3 Intervention).

So it is imperative that you act promptly to ensure Revenue know that you are working on a disclosure, and that they don't escalate or that you end up statutorily time-barred from making a qualifying disclosure.