Annual 2020 Report RPC014650_EN_PR_D_31 Annual Report 2020 Ninety-eighth Annual Report of the Revenue Commissioners for the year ended 31 December 2020, including progress on the implementation of Revenue’s Statement of Strategy, in accordance with the Public Service Management Act 1997, presented to the Minister for Finance. April 2021 Our Mission Our Vision To serve the To be a leading tax community by fairly and customs and efficiently administration, collecting taxes and trusted by the duties and community, and an implementing employer of choice customs controls Our Core Values Respect Professional Collaboration Agility Integrity Contents Board’s Review for 2020 5 Our Organisational Structure 10 Main Results 2020 13 Collection of Taxes and Duties 16 Delivery of Critical COVID-19 Supports 17 Securing Compliance by Design and Excellent Service 24 Facilitating High Voluntary Compliance Levels 24 Service Delivery 25 Understanding Taxpayer Needs 27 Supporting Tax Policy 28 Brexit 30 Confront Non-Compliance 33 Compliance Programmes 34 Use of Data, Intelligence and Analytics 35 Target and Disrupt Shadow Economy Activities 36 Ensuring Fairness, Transparency and Effectiveness 40 Debt Collection 42 Collaboration 43 Making it Work: Our People and Structures 47 Our People 47 Our Culture 52 Innovation 53 Taxpayer Confidentiality 54 Public Service Reform & Civil Service Renewal 54 Governance 56 Revenue Management Committee at Assistant Secretary Level 59 Financial Management 61 Account of the Receipt of Revenue of the State collected by the Revenue Commissioners in the year ended 31 December 2020 63 2020 Table Index 81 Appendix 1 - Donation of Heritage Items 95 Board’s Review for 2020 Our Annual Report for 2020 recounts an unprecedented year for Revenue. As is the case for many businesses across the country, the COVID-19 pandemic impacted key elements of our core business as a tax and customs administration. Notwithstanding this we continued the critical work of collecting taxes and duties. In addition to providing a range of important services to taxpayers, we played a central role in the delivery of key business supports as part of the national response to the COVID-19 pandemic. We also maintained our focus on Brexit preparations for the UK’s withdrawal from the EU on 31 December 2020. In 2020, Revenue collected total gross receipts of €82.3 billion, including €15.4 billion in non- Exchequer Receipts collected on behalf of other Government Departments and Agencies. Net Exchequer receipts after repayments were €56.2 billion, a decrease of 3.6% or €2.1 billion on 2019. Despite the challenges of 2020, strong voluntary tax compliance levels were sustained with only a relatively marginal reduction on 2019. This reflects the positive engagement by businesses, individuals and tax practitioners throughout 2020 and the strong commitment to meeting tax obligations and ensuring vital services and supports are maintained. Having regard to the Government’s public health guidelines, tax audit and compliance interventions at taxpayers’ premises were suspended from March 2020. However, we continued to progress compliance matters electronically and by telephone, completing over 595,000 audit and compliance interventions which yielded over €487 million. Our agility in handling the challenges that unfolded during the year was made possible by our people. Through their resilience, adaptability and innovation, we delivered key business support schemes that were developed at significant speed, often within days of being announced. eW achieved this despite the fact that, almost overnight, we needed to adjust to a largely remote working environment. We also put immediate measures and protocols in place to ensure a safe working environment for the staff who continued to work on-site in essential roles that could not be operated remotely. In addition to delivering our core business, many of our staff worked on other aspects of the national COVID-19 response outside of Revenue’s direct remit, including supporting the HSE’s contact tracing programme. We are enormously proud of how the organisation responded to the challenges presented by the COVID-19 pandemic. Our people rose magnificently to these challenges and we thank each and every one of them for their steadfast commitment, professionalism and resourcefulness during 2020. COVID-19 Response The introduction of real-time reporting for PAYE in 2019 meant that when the pandemic escalated in March, we could quickly reengineer our PAYE system, in conjunction with the Payroll Software sector, to support impacted employers and employees. This enabled us to operate the Temporary Wage Subsidy Scheme within days of its announcement by Government. The scheme provided more than €2.8 billion1 in support to 66,600 employers in respect of over 664,500 employees between 26 March and 31 August. As part of the July Jobs Stimulus package the Employment Wage Subsidy Scheme replaced the Temporary Wage Subsidy Scheme from 1 September. To the end of quarter 1 of 2021, over € 2.6 billion2 had been paid under the scheme to over 48,400 eligible employers in respect of 546,300 employees. 1 Gross TWSS subsidies claimed as at 4 January 2021 2 Gross EWSS subsidies claimed as at 1 April 2021 5 Following the announcement of the Covid Restrictions Support Scheme introduced in Budget 2021, we designed an online registration process for the scheme in just over 2 weeks with the first payments made to eligible businesses from 17 November. A total of €423 million3 in CRSS payments had been paid to 21,800 businesses in respect of 24,100 business premises up to the end of quarter 1 of 2021. In March 2020, as part of a range of measures put in place to assist businesses experiencing trading difficulties caused by the impacts of COVID-19, we suspended the application of interest on late payments of VAT and PAYE (Employers) liabilities. These liabilities were subsequently incorporated into the Debt Warehousing Scheme, which enables businesses to ‘park’ VAT, payroll and self-assessed income tax debt as well as Temporary Wage Subsidy Scheme overpayments. As at 31 March 2021, €2.3 billion of tax debt was warehoused for over 80,000 businesses. Each new scheme involved the immediate mobilisation of an organisation-wide, cross-functional team, covering legislation, operational design, systems changes, system testing, and frontline service readiness. We proactively communicated with businesses, individuals and tax agents, including providing detailed operational guidance, so that the information that was needed in respect of the different supports was immediately available. In addition to the wide range of supports we administered on behalf of the Government during 2020, we also implemented a suite of concessional measures across an extensive range of tax related matters under the care and management provisions of Section 849 of the Taxes Consolidation Act 1997. Brexit Despite the challenges of COVID -19 we continued our preparations for Brexit on all fronts throughout 2020. We hosted a series of webinars to further assist trade and business in understanding the changes that Brexit would bring. We also wrote to 149,000 businesses with Brexit preparatory advice and further engaged with over 14,500 businesses via telephone. The launch of our Customs RoRo Service optimises the efficient movement and, where necessary, control of goods and vehicles when moved by ferry between Ireland and Great Britain. To ensure our operational readiness, we recruited and trained additional staff to carry out Brexit related roles. We completed significant work to increase our IT systems’ capacity to cater for the trade with the UK that would be subject to customs and other regulatory controls, post Brexit. We also established a 24/7 Customs helpline to assist with queries from trade and business on customs clearance, and import and export controls. We are almost four months on from when the UK withdrawal from the EU took full effect. As a direct consequence of this, the trading environment between Ireland and Great Britain has changed irrevocably. Now regarded as a 3rd country for trade purposes, customs formalities and other regulatory requirements apply to goods moving to, from and through Great Britain. This brought an end to the seamless trade we have known for years. We recognise that the significant and permanent change in the trading arrangements with Great Britain represents the biggest change for trade and business in almost 30 years, since the creation of the EU Single Market. We know that some businesses are successfully trading with Great Britain, helped by their extensive and advanced preparations. However, we are also aware that some businesses, large and small, both in Ireland and Great Britain continue to be challenged in adapting to the new arrangements and the need to comply with customs and other regulatory formalities. In time, dealing with the customs and other regulatory formalities that now apply to goods moving to, from or through Great Britain will become routine for importers, transport companies and truck drivers. We are continuing to support trade and business in adapting to these new 3 Gross CRSS claims processed for payment as at 1 April 2021 6 formalities and resolving specific individual difficulties. Similarly, the UK’s departure from the EU has not been without its challenges for us as a tax and customs administration. We have been monitoring activity levels within our IT systems since 1 January 2021 and, in early January, we identified degradation in performance during times of peak processing. This resulted in delayed responses to customs declarations and other messages lodged by trade. We are conscious of the impact these intermittent performance issues had on trade and businesses. We apologised for the inconvenience caused and immediately set about addressing the identified performance issues.The measures we implemented have had a positive impact on processing performance and we are continuing to focus on improving performance and ensure that there is a performant, resilient system that fully meets the demands placed on it.