Posts

Revenue’s game-changer for tax administration

Revenue’s game-changer for tax administration

/in

As we have discussed recently, the Revenue system has been undergoing massive amounts of welcome changes in recent years. As Revenue continues to invest in the future of their systems, how we do business daily is likely to shift along the way.

Revenue have become increasingly advanced and sophisticated in their systems over the past couple of years and their systems will continue to evolve. Where tax administration was once a long and protracted process, Revenue have managed to create a game-changing and more sophisticated system to catch non-compliance by investing in their IT and data analytics in a much more streamlined fashion.

“A system is only as good as the information it runs on – Revenue’s ability to collect vast and detailed information, as well as its ability to sort and collate this into useful data means their vigilance and efficiency is increasing year on year,” says Cian Rowlands, a tax manager in Ecovis DCA.

Revenue’s recent focus on the area of data analytics allows them to follow a more risk-assessment-based approach to tax issues with one leading tax commentator noting:

“Revenue have become much more advanced and sophisticated in its use of analytics and e-audits in recent years. Taxpayers can see it for themselves when they are filing returns and paying their tax online.

Revenue is now better positioned to tackle non-compliance. It is using data to determine which returns are higher risk and realigned its operating structure in 2018 to complement that. Revenue is focusing its resources on those cases which it believes will most likely deliver a yield on an audit.”

Revenue now utilises a risk-evaluation tool called the Risk Evaluation Analysis and Profiling (REAP), which is a highly sophisticated system that takes data from numerous sources and cross-checks this data against tax returns filed in order to attribute a risk ranking to the individual. Higher risk individuals are more at risk of being selected for audit.

This system continues to advance, and Revenue continues to refine the process. This increased sophistication means that Revenue can now carry out digital audits on an individual if an issue is flagged. As well as this, Revenue’s appeals system has been streamlined recently to begin to clear the backlog caused by the pandemic.

We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.

CREDIT RISK MANAGEMENT/INSURANCE

/in ,

Credit Risk immediately sounds like a term which should strike fear into business owners everywhere. Nobody wants to hear the word risk when associated with your business, but it needn’t be that way and today we are going to speak to you about managing your credit risk.

 

Credit risk can be simply defined as the potential that a borrower may fail to meet financial obligations on previously agreed terms. The main goal of the Credit risk management systems we will be speaking about today is too secure overall credit risk parameters and ensure that neither borrower nor lender suffer as a result of these risks. Managing your Credit Risk can have great benefits for your business including increasing cash flow, increasing credibility, better business development, and more secure trading options to name but a few. Having this backing may also give you peace of mind in terms of the security and longevity of your company.

 

Following the financial crisis, borrowing and lending became a financial minefield, and whilst things have since eased up and more options have recently become available for both parties, the need to be vigilant remains. 25% of all bankruptcies are caused by unpaid invoices, so you may be currently taking more risks than you were aware of. The risks associated with borrowing and lending have not eased as much as one might expect in recent years, and both parties must be aware of the dangers associated.

 

Some Credit Risk Management companies offer to advise and protect clients in order to allow safe trading, effectively insuring a company’s finances ahead of trading. The first step in Credit Risk Management is to gain a full and comprehensive picture of the company’s finances and position as well as having a solid idea of the company’s ability to lend to customers. Having this comprehensive picture then allows the creation of an appropriate action plan for managing your credit risk, having a simple plan in place will then pave the way for more sophisticated credit management solutions in your company’s future.

 

Credit insurance is one fairly simple way to manage your credit risk which may assist your company in growing profitably. Cash flow is the most important and also the most vulnerable aspect of business and credit insurance could give your company peace of mind against any bad debts. Credit insurance insures your company against the potential of your customer’s failing to pay their debts within your agreed parameters. This in turn ensures that your company finances and risk scores do not suffer when it comes to your own future borrowing. Non-payments are one of the top ways in which your business can be weakened, and Credit Insurance can be the ideal way to navigate this issue. In this way, you are assured that your company will reach its anticipated targets even if there have been some defaults.

 

If you find yourself in need of advice, support, or guidance in how to go about credit risk management in your business please don’t hesitate to contact us here at DCA Accountants where we are always happy to help.