The Gazette 1988

GAZETTE

MAY 1 9 88

tax liabilities with only minimal correspondence with the Capital Taxes Branch. Self-assessment gives th e solicitor much more control and offers the prospect of being able to plan his/her business to a much greater extent. The administration of estates will also be completed earlier. An additional positive effect of the scheme i s the likelihood that solicitors will gain new insights into the operation o f th e tax. This should result in an enhancement of the tax advice given to clients and in less problems a t the payment stage. Specially designed forms and Instructions The design of the return form was identified as critical to the success of the pilot study. The intention was to enable the taxpayer and his or her adviser t o go through the assessment procedure logically and step-by-step. The design o f the f o rm, suppo r t ed b y t h eins - t r u c t i on s, wa s i n t ended t o encapsu l a te t h e necessa ry k now l edge t o suc ces s f u l ly complete a computation. To the extent that perfection i s possible in the real world, careful adherence to the step-by-step approach outlined in the form should mean that any practitioner completing it will not omit any crucial steps or information required for carrying out a correct computation. Most solicitors participating in the scheme have found this to be the case. Even difficult issues such as aggregation and apportionment have proven to be t r ac t ab le using t h e self- assessment form (in this regard we should mention th e invaluable c on t r i bu t i on wh i ch Mr . John Quinlan, since retired f r om Revenue, made to the design of the form and th e planning o fth e scheme). The instructions booklet is also a useful primer on Capital Acquisitions Tax, apart altogether from its function in relation to self- assessment. Assurances for solicitors and executors Some solicitors have expressed concern that because the pilot scheme i sa vo l un t a ry one, participation may expose them to potential negligence claims from their clients.

In order to deal with this concern we ca n o f f er t h e f o l l ow i ng assurances an d incentives t o participants in the pilot scheme: — every self-assessed r e t u rn submitted under the Scheme will be checked by a Revenue official and th e participating •solicitor will b e immediately notified of any discrepancies or errors in his or her computations; in the event o f overpayments refunds are, and will continue to be, made immediately w i th interest; — if, subsequent to the time of self- assessment and payment, i t transpires that i twould have been more advantageous from the point of view of the taxpayer to self-assess o n a different basis (e.g. by taking a different va l ua t i on date wh i ch still accords w i th the facts o f the case), the Capital Taxes Branch is prepared t oaccept a re - assessment and, i fnecessary, refund any overpayment of tax wi th interest; — for the duration o f the Pilot Scheme, and in respect o f any cases coming within the ambit of the Scheme, the Capital Taxes Branch will no t invoke th e secondary accountability pro- visions i n the CAT legislation against either a solicitor o r executor once tax has been paid on the basis of an agreed com- putation. This means that i f additional i n f o rma t i on sub-

sequently becomes available which indicates that the original assessment and payment were too low, the Capital Taxes Branch will not seek payment of the tax shortfall from either the solicitor or executor involved. We hope that these assurances will encourage participation i n th e scheme. Progress Report The first phase of the pilot study, from June t oDecember 1987, involved 186 firms of solicitors. By the end of the year approximately 2 0 0 assessmen ts ha d been received (the number has more than trebled since then). Solicitors using se l f - assessment were generally very pleased wi th the scheme and a number of firms are making increased us eo fself- assessment a s th e advantages become apparent. The accuracy of the returns submitted so far has been high. While some forms needed a correction of some kind these were mainly insignificant — as can be illustrated by the fact that the ne t extra amount o fta x collected as a result of corrections was less than 1% of total receipts under the scheme. Seminars/Workshops o n self assessment While the self-assessment form and instructions constitute a fairly complete do-it-yourself package, we appreciate that there is also a need for a supportive educational effort. A series o f one-day workshops has been organised jointly with the Law Society. These are based on the principle o f learning by active involvement. Practitioners are given a range o f carefully structured p r ob l em cases wh i ch t hey complete b y self-assessment o n the new form. Revenue officials give talks on the more complex aspects and assist in the practical exercises. About t w o hundred solicitors have now attended the workshops i nDublin and i n the main provincial locations. The response t o the seminars has been excellent. There has been a substantial increase i n th e numbers of self-assessments being submitted t o th e Branch. Th e number o f corrections necessary has also decreased dramatically. Revenue staff have also gained

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