Ms Sandra Clarke:

I am here to talk about my clients, mainly small and medium business people, and the process of preparing their tax returns. The process begins for us in January of each year when we send out a questionnaire to our clients asking them to complete the return with the information we need to ensure the accuracy and completeness of returns. This process takes a few months as the level of questioning is quite detailed and a good deal of information must be gathered to accompany the questionnaire in order to complete the return.

In addition to that, the taxpayers and we, the advisers, need to get information from third party intermediaries to complete the returns. This information is only made available to us very late in the day. To give an example, if somebody has a United Kingdom property and a UK tax return to complete, we need the information from their tax return for 5 April, prior to the filing date, and they have until January after the October deadline to file that return.

To give members an idea of how complex tax legislation has become in recent years, in 2003 the tax return form had 347 possible boxes to be completed. In 2012, that figure has reached a staggering 635, which shows the enormous changes that have taken place in tax legislation in the past decade.

If estimates are used in returns, that will lead to a good deal of going back and forth with Revenue to correct those returns. It will also lead to inaccurate returns and in some cases, if those returns are not corrected, it will fall back on the small businessperson. That could lead to them being selected for audit. Members will see on their screen an example of a car dealer, called "Michael", based in the midlands. If he has an average pay and file bill of €40,000, does his best to get all the information to his adviser but despite best efforts it does not happen and the return is wrong, is selected for audit three years later and an underpayment of €8,000 is discovered, there could be an additional cost to "Michael" of a penalty of approximately €1,600 and interest at 8% per annum, coming to €1,920, giving a total additional cost of €3,520, which is a good deal of additional pressure on the small business payer. Mr. Irwin will explain the cash collection side and the payment of tax.