TRAVEL AND subsistence allowances that should have been taxed on a case-by-case basis led to Donegal County Council making a €799,928 settlement with the Revenue Commissioners.
The council was listed in the tax defaulters list published on Tuesday as having made the settlement following a Revenue audit.
In a statement yesterday the council said the settlement followed audits in 2008 and 2009 covering, respectively, PAYE/ PRSI and Relevant Contracts Tax/VAT.
While the audit on the latter found the council was compliant, the other audit found a difficulty. The years concerned were 2007 and 2008.
“The non-compliance essentially arose due to a change in policy, custom and practice which saw a requirement to identify, specifically, individual transactions whereas, prior to this, a global allowance based upon an averaged period was used,” the council said in a statement.
It said the majority of its expense reimbursement schemes are non-taxable and were found to be compliant.
The difficulties arose with “certain site supervision, fixed travel allowances for certain outdoor staff and related subsistence allowances”.
The original rates and allowances in these areas were based upon nationally agreed rates.
However, they needed to be revised as a result of a Revenue interpretation, according to the council.
The relevant allowances for site supervisory and other relevant staff were amended as taxable allowances in January 2009.
The council has now put in place changes aimed at ensuring compliance.
The changes include establishing a more rigid process in implementing Revenue circulars and advise notes and a systematic review of any proposed new allowances to ensure tax compliance.