Level 1 compliance interventions are designed to assist taxpayers by reminding them of their obligations and giving them the chance to correct mistakes without the added expense and stress of a more extensive inquiry. These interventions are broad in scope and only happen when Revenue hasn’t already looked into the matter in detail.

Examples of Level 1 interventions include:

• A notification reminding taxpayers about outstanding tax returns.
• A request for self-review.
• A profile interview.
• Engagement with businesses under the Cooperative Compliance Framework (CCF).

More information about these interventions is provided in the following paragraphs.

A Level 1 intervention may be suggested in real-time when a taxpayer submits a return or through a letter to a group of taxpayers asking them to review a particular issue. Alternatively, it may be communicated through media or a similar public announcement, alerting relevant taxpayers to an area of concern that they should review. Regardless of the communication channel used, the goal of Level 1 compliance interventions is to remind and encourage taxpayers to meet their compliance obligations.

Reminder Notification of Outstanding Tax Returns.

Taxpayers have a responsibility to file all necessary tax returns and pay their tax liabilities on time. However, sometimes even compliant taxpayers might miss the deadline. In those cases, Revenue may send a reminder notification to file the return and pay any associated liability. The reminder might be sent as part of a wider ‘bulk issue’ or could be mentioned in media campaigns, press releases, or website statements. If a compliance risk is identified, these interventions may escalate to Level 2 or Level 3.

Request to Self-Review.

To combat non-compliance, Revenue will conduct targeted reviews of specific issues that are prevalent across a group of taxpayers. These reviews require taxpayers to self-review the information provided in their tax returns. The requests will fall under Level 1 interventions, giving the taxpayer a chance to self-correct or make a qualifying disclosure without prompting. It’s highly recommended that taxpayers take advantage of these opportunities to self-review because any subsequent intervention by Revenue will be at Level 2 or Level 3.

Profile Interviews.

Sometimes, Revenue may want to meet with a taxpayer (either online or in person) to gain a better understanding of their business and its tax treatment. Profile Interviews won’t be conducted if specific tax compliance risks have been identified. These interviews are categorised as Level 1 interventions in the Compliance Intervention Framework, which gives the taxpayer an opportunity to self-correct or make a qualifying disclosure if necessary. However, if compliance issues are identified, Revenue may initiate a more in-depth Level 2 or Level 3 intervention.

Choosing Which Taxpayers to Review for Compliance.

Revenue typically chooses which taxpayers to review based on the presence of certain risk factors. However, we also randomly select a small number of cases to check that our risk approach is working properly.

In the past, we’ve used methods like REAP (Revenue’s electronic risk and analysis system) and Real-Time Risk Analytics (for VAT and PAYE) to select cases. While these methods will still be used, our compliance management approach is adapting to the growing importance of real-time tax administration.

As we get more data in real time, we’ll be able to spot and address non-compliance much more quickly. This means we can start Level 1 compliance interventions much sooner. This is similar to the approach we’ve taken with PAYE real-time compliance, and with the COVID-19 support schemes.

When we don’t think that real-time engagement is enough to solve a risk, we’ll undertake more detailed reviews like a risk review, tax audit, or investigation. In serious cases, this may even lead to prosecution. We’ll still choose cases based on risk factors, and we’ll start compliance interventions when we find historic issues.