REVENUE COMMISSIONERS HAVE contacted a number of Irish influencers with a Level One Compliance Intervention urging them to declare any income they may have earned via online platforms.
The intervention measure is the first of three levels of an audit and allows taxpayers to self-correct their tax returns or submit an “unprompted qualifying disclosure” of additional income.
The letter, which was sent to a number of influencers and has been seen by The Journal, says Revenue is “aware of the income earning potential from various activities conducted via online platforms”.
It adds: “If you are receipt of income, gifts, free use of goods or services, virtual currencies or tokens which have been generated via online platform activity, we would like to take this opportunity to outline your obligations regarding the inclusion of this income on your tax returns.”
The letter details what the influencers must do, depending on their PAYE status. The intervention is one of three levels before a full audit is conducted on a taxpayer.
Influencers often earn their income primarily through advertising or promoting items and goods on social media. Companies will frequently offer gifts, paid trips or access to events in exchange for ad space on the creator or influencer’s social media page.
Content online must fall in line with a number of regulations from the Advertising Standards Authority’s guidance on declaring marketing material online, including using labels or hashtags such as ‘#Ad’ or ‘#Sp’.
The Consumer Protection Act also prohibits “misleading, aggressive or unfair commercial practices” in advertising and many platforms now require creators to label their content using similar hashtags (‘#Ad’ or ‘#Sp’) or by otherwise making it clear to users that the material is sponsored.
Revenue say it provides “extensive opportunities for taxpayers to get things right and to voluntarily correct mistakes” and make the “proportionate interventions in response to identified risks of possible non-compliance”.
Taxpayers can correct any potential mistakes that may have been incorrectly placed on their tax returns themselves, through a ‘self-correction’, without facing any penalty.
Under this intervention level, taxpayers can disclose any potential earnings they may have accidently left out on their tax returns through an ‘unprompted qualifying disclosure’.
Taxpayers who receive a level one intervention notice are not always required to complete either of these actions as the letter details they should be taken “as appropriate”.
Although, taxpayers may face severe consequences if further audits or investigations find there were additional earnings that were not disclosed at this point.
The Journal has contacted the Revenue Commissioners for a comment.
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