Don't Ignore the Nudge: A Content Creator's Guide To Understanding Revenue's Level 1 Notifications
The content creation industry has seen exponential growth in recent years, especially in Ireland. An Adobe study reveals that nearly one in four people in surveyed countries are now active creators. This isn't just a hobby; it's becoming a significant part of the economy. But, as with any emerging industry, regulatory agencies often lag behind in adapting their frameworks. Recognising this gap, the Irish Revenue Commissioners have issued "nudge letters" aka Level 1 notifications to Irish content creators urging them to regularise their tax affairs:
What's different this time?
The last digital industry to come under Revenue's scrutiny was Airbnb hosting in 2018. Back then, Revenue decided to issue investigation notices, (the highest level of intervention) and although it wasn't particularly hard to show the liabilities, it was like trying to fight your way out of a snowstorm by licking each snowflake you can reach, fun maybe (and briefly), but largely turned out to be a fruitless exercise due to the resources and effort involved in conducting the investigations. This time, Revenue is taking a more nuanced approach, issuing Level 1 notifications and judging the responses instead of diving straight into full-scale investigations.
What is a level 1 notification?
A Level 1 notification is not just a letter in your mailbox; it's a multi-channel approach by Revenue to remind you of your tax obligations. Designed to be broad-based, these interventions occur before Revenue dives into any detailed examination of your financial records. They can manifest in various ways:
Ignoring these notifications can escalate your case to a Level 2 or Level 3 intervention, which involves more stringent scrutiny and significantly higher penalties without the opportunity to make a voluntary disclosure.
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How To Deal With A Level 1 Notification
Addressing Level 1 Interventions
After receiving a Level 1 intervention, you have three main avenues to address compliance matters:
Irish Revenue's issuance of Level 1 notifications to content creators signifies a more nuanced approach to tax compliance in this burgeoning industry. It's crucial to engage in the process and not ignore these notifications. If you find yourself in this situation and are unsure of how to proceed, we encourage you to reach out for an initial conversation.
You can schedule a 15-minute no obligation call with us here.