Dáil Éireann debate -
Wednesday, 23 Feb 2000

Vol. 515 No. 1

Written Answers. - Tax Assessments.

Batt O'Keeffe

Question:

69 Mr. B. O'Keeffe asked the Minister for Finance if he has satisfied himself with the accuracy of bills issued by the Revenue Commissioners in view of the fact that one in four tax bills in the United Kingdom is incorrect. [4866/00]

Minister for Finance (Mr. McCreevy):

Under the self-assessment system of tax administration, responsibility for the submission of a correct tax return rests with the taxpayer. Revenue inputs the data on the tax returns into its computer systems, issues a notice of assessment to taxpayers and creates a tax charge or repays any tax overpaid, as appropriate.

Under the self-assessment system the majority of income tax payers file their tax returns with Revenue each year around 31 January – the return filing deadline. Inevitably, in this situation errors will arise in the processing of such a large volume of information. Revenue staff do, however, perform a routine level of checking or "repair" of tax returns before inputting the data into the computer systems, so as to try to eliminate some of the more common errors made by taxpayers or their agents. This procedure at the initial processing stage ensures many errors or omissions that would otherwise give rise to incorrect assessments are remedied, thus increasing the overall level of accurate tax assessments.

I am informed by the Revenue Commissioners that the level of amendment made to assessments has been monitored for a number of years. In addition to the level of amendment, returns are also examined to determine whether amendments are attributable to mistakes by taxpayers and their agents or to mistakes by Revenue. The results of this exercise for the most recent year available, 1997-98, are as follows: on average 15% of income tax assessments are amended once, while a further 3% are amended more than once. Responsibility for the errors giving rise to these amendments can be ascribed between taxpayers and their agents, on the one hand, and Revenue, on the other, roughly on a 50:50 basis. The corresponding figures for corporation tax are 9% of assessments were amended once, while a further 2% were amended more than once.

Taxpayer errors or omissions can relate to genuine errors or to what is termed "instalment filing", that is, some claims for relief are not included with tax returns when filed. These claims are made subsequently, resulting in an amended assessment.

Bearing in mind the complexity of tax legislation and the fact that taxpayers, agents and Revenue staff are human and therefore capable of making mistakes, it appears that the level of accuracy of assessments is within acceptable limits. Initiatives such as Revenue's on-line service, which will cater for the electronic filing of returns, as well as its ongoing commitment to improved performance should result in further reduced levels of error.