‘Revenue guidance on R&D claims is very poor’

DONAL O’LEARY Managing Partner PKF O’Connor Leddy & Holmes

TAX ISSUES The cost of tax compliance and the burden on clients has increased continually over a number of years, and it has become increasingly harder to make direct contact with Revenue, which has caused delays in getting queries resolved. The Revenue has now issued new guidelines on interventions which will further increase the cost of compliance and the cost of making errors on tax returns. The guidance on R&D claims is very poor and is an area that Revenue needs to give clarity to businesses on so that the claims for relief are fully understood.

TAX DEBT An amnesty on the warehoused tax liability would completely undermine the integrity of the tax system. Increasing interest rates will have an impact some companies’ ability to repay tax debt. This is likely to lead to solvency issues, which have more alternatives available to find a solution now than in the past.

POLITICS It is possible that businesses do not fully accept that Sinn Féin may come into power in Ireland and therefore they have not been taking any steps to prepare for that possibility. Some of the policies that Sinn Féin have spoken about will have a critical impact on both personal and business taxes and would lead to reduced investment in the Irish economy.

CAPITAL TAXES There is no doubt that a reduction in CGT and CAT rates would increase tax collection considerably as it would increase the level of transactions. It is amazing that the government can have very attractive reliefs for foreign buyers of Irish property while keeping these rates high for the Irish-owned entity.

CORPORATION TAX It is difficult to see that the top 10 corporate tax payers would continue to pay in excess of 50% of the tax, so the government has to be careful how it spends this money. It should be used to increase the public housing stock, as it is now impossible for younger people to purchase houses in Dublin. These people will emigrate for a better lifestyle, which is shocking considering the amount of money spent on their education.