Revenue Audit Questions

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fangs

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Preparing for an audit, two questions I hope you can help with. Any references or precedent to back up answers appreciated. I'm a single person PLC.

  1. I get reimbursed by client for work related foreign travel, typically on a vouched expenses basis. I pay for expenses using personal visa. Am I entitled to claim the civil service foreign travel and subsistence rates from my own PLC? Typically these would be greater than incurred expenses and also cuts down a lot on paperwork.
  2. For the domestic subsistence allowance (>10hrs) can travel time to a site (not headquarters) be used towards calculating the duration away from HQ. i.e. takes 2 hours to travel to/from site, on site for 8.1 hours. Billable hours is 8.1 hours as travel time is built into rate. Is my time away from base 8.1hours or 10.1 hours?
 
fangs said:
I get reimbursed by client for work related foreign travel, typically on a vouched expenses basis. /QUOTE]

Can you explain exactly how this is done. Does your PLC invoice and include on it out of pocket expenses?
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for instance, I may spend a week in Europe at a vendors premises on behalf of a client. I will personally pay for flights, hotel, food, taxis etc. My PLC invoices the client using vouched expenses and is reimbursed into company account. I personally then invoice my company for expenses using the civil service foreign travel and subsistence allowances.
 
@fangs If the client pays your Company I can see that there is nothing stopping the Company paying you on a 'civil service rate' and the Revenue wont be able to challenge that. You need to be careful of any element of double compensation. Also I believe that VAT should be charged on the expenses invoiced to company.

I presume your time issue is to do with subsistence claims as well. If your place at work is defined - seem to be - then that is the closck for the departure time. You should note though that Revenue are looking for properly documented expenses claims. So for mileage and subsistence - date / client / who with and for how long / purpose.

Also if your business is significant - you would need a tax advisor. One case involved getting correct VAT advice on exports and there was a saving of €100k+
 
thank you paddy & wizard. Audit still ongoing and am holding ground on my approach. Will let you know outcome, initial vague response from RC was that they would allow reimbursable expenses from client only.

Yes, have been careful re double compensation, have expense sheets detailing times to and from normal place of work to vendors and have been charging VAT on expenses also. Its a minefield with very poor clear / guidance from RC. From my experiences so far I'd rather be dealing with Mr Soprano.
 
fangs said:
thank you paddy & wizard. Audit still ongoing and am holding ground on my approach. Will let you know outcome, initial vague response from RC was that they would allow reimbursable expenses from client only.

Yes, have been careful re double compensation, have expense sheets detailing times to and from normal place of work to vendors and have been charging VAT on expenses also. Its a minefield with very poor clear / guidance from RC. From my experiences so far I'd rather be dealing with Mr Soprano.
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The situation is fairly clear as they get in taxation terms, but probably confusing to you because you're a small one man company, and therefore the line, between you as a paid employee/director and the separate entity that is the company, is blurred.

The company has the arrangement with its customer and charges them accordingly, including its out of pocket expenses as agreed, and since these are ancillary to the main supply it accounts for VAT on these as part of the supply to the customer.

Separately, the company employs you as the employee/director, to carry out specific duties, which involve you personally incurring travel expenses etc..., and there are rules governing the rates at which it can reimburse you for these expenses, set out in SP-IT/2/07 ([broken link removed])

From what you've posted it sounds as though you're beyond reproach on this issue anyway.
 
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Thank you for the reply Mandelbrot. Your response is what I had presumed and had been applying since I setup the company nearly ten years ago. I began to doubt myself when my accountant told me the auditor indicated that they would allow reimbursables only. Mind, the auditor did not say anything in writing or it has yet to come to a head. My impression is that the auditor is trying to soften me up. My accountant is pushing for a meeting now to force the issue or finalise the audit.

Does anyone here have experience of the review or appeals procedure should it come to that. I've read the revenue guidelines but would value hearing any first hand experiences. It seems to me that the particular auditor I'm dealing with is playing games and using scare tactics and it may come to a point where I have to call their bluff so they get a bit real. The scenario above is just one example where I feel my entitlements are being denied or where I think the auditor is being unreasonable.

My accountant has written to the auditor last week reaffirming my position, we'll see what the response is. I'll let you know.
 
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