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04/08/2021

Who didn't pay their taxes? Midlands motor vehicle dealer's huge multi-million euro Revenue bill revealed

Dentists, vets, jewellers, doctors also on the list but €120 million recouped

Who didn't pay their taxes? Midlands motor vehicle dealer's huge €11  million  Revenue bill revealed

Revenue is responsible for collection taxes that help pay for public services

A midlands based motor vehicle dealer owes more than €11 million to the Revenue Commissioners after running up a huge bill to the State in unpaid taxes which should have been paid to help fund hospitals, policing and other public services.

The Revenue published the List of Tax Defaulters in respect of the period January 1 to March 31, 2021.  During the same three months, investigations resulted in more than €120 million in unpaid taxes being recouped.

While most people pay up when Revenue calls others don't and have to be subjected to extensive audits to find out how much they owe.

Leading the way on this front by some distance is Mr James Joseph Daly of 13 Grays Meadow, Cloghan, Co Offaly. The motor vehicle dealer, who trades as Any Gear, had a tax bill of €4,577,954 following a Revenue investigation for non-declaration of
income tax and VAT. The interest on the unpaid tax was caculated at €2,556,067 with penalties of €4,577,954.

Revenue say that by the 31st of March Mr Daly owed the State €11,711,975 for not paying his way. None of the money owed had been paid to the end of March.

The Offaly operator is on Part 2 of the list compiled pursuant to Section 1086 of the Taxes Consolidation Act, 1997. The total number of settlements published is 30 The total value of these settlements is €21.3m. Where a taxpayer has failed to pay or failed to enter into an arrangement to pay the full amount of the settlement, the amount unpaid as at 31 March 2021 is indicated in the list.

Someone else on the same list is a doctor at the Beacon Clinic in Dublin. Dr Ray Sean McDermot, a medical consultant at 12 Beacon Consultants Clinic in Sandyford had unpaid tax of €593,644.45. When interest and penalties were added in his bill ran to €1,065,854.92. He owed €523,923.10 at the end of March this year.

Another big debt was owned by Ohshima Ireland Limited of 9 Woodfoord Court, Woodford Business Park, Santry, Dublin 9. The precision metal component manufacturer had unpaid taxes of €2,516,643.75 following a Revenue Audit for under-declaration of corporation tax, PAYE/PRSI/USC and VAT. The final bill ran to €4,002,701.99. All had been paid by the end of March 2021.

See FULL PART 2 LIST HERE. 

Revenue also publishes a Part 1 list which includes persons in whose case the Court has determined a penalty relating to a settlement, or has imposed a fine, imprisonment or other penalty in respect of a tax or duty offence.

See FULL PART 1 LIST HERE

Revenue say these published settlements reflect only a portion of all Revenue audits and investigations. 

In the 3-month period to 31 March 2021 a total of 234 Revenue audit and investigations, together with 15,720 Risk Management Interventions (Aspect Queries and Profile Interviews), were settled, resulting in a yield of €121.4 million in tax, interest, and penalties. 

#EXPLAINER AND FURTHER INFO ON LATEST LIST

Part 1: Court Determinations

Court Determination of Penalty: Subject to certain criteria, in settlement cases where there is no agreement to a penalty, or a person fails to pay an agreed penalty, the Court determines the penalty. Details are published when the Court determined penalty exceeds 15% of the total tax and the total of the tax, interest and penalty is more than €35,000 and a qualifying disclosure has not been made: 
There were no such cases in the 3-month period to 31 March 2021
Court imposed fine, imprisonment or other penalty: Details are published when a fine or other Court penalty is imposed in respect of tax or duty offences. Court penalties may include imprisonment, partly suspended or suspended sentences, community service in lieu of imprisonment, and closure orders.

44 such cases are published and €106,067 is the total of court fines imposed.
These include:

  • 11 cases relating to failing to lodge tax returns, producing an incorrect invoice/document and claiming tax relief to which the taxpayer was not entitled. Court fines totalling €26,250 and two 18-month sentences, both with six months fully suspended, were imposed;
  • 23 cases of misuse of marked mineral oil and 1 case of oil laundering in respect of which Court fines Totalling €67,501 and one 12-month sentence, suspended for two years were imposed;
  • 6 cases of excise offences for tobacco smuggling, illegal selling of tobacco and failure to hold a current liquor licence in respect of which Court fines of between €632 and €2,500 were imposed;
  • 3 cases of obstruction of a Revenue officer, in respect of which Court fines totalling €2,800 were imposed.


Part 2: Settlements

Settlements are published when the extensive voluntary disclosure options are not availed of and the default arises because of careless or deliberate behaviour:

30 cases are published today and €21,371,188 is the total settlement amount in these cases; 

  • 16 cases were for amounts exceeding €100,000 of which 5 exceeded €500,000 and 3 of which exceeded €1 million;
  • 10 are cases in which the settlement was not fully paid as at 31 March 2021; 

€13,811,898 was the amount unpaid as at 31 March 2021. In some cases, collection/recovery of the full unpaid amount will not be possible (for example, company liquidation).

Background

Revenue says its compliance programme is carried out under the "Code of Practice for Revenue Audit and other Compliance Interventions" (the Code). The significant benefits of making a ‘qualifying disclosure’ are set out in the Code and include availing of reduced penalties, avoiding publication in the List of Tax Defaulters, and avoiding possible prosecution.

Publication

Revenue says it publishes the List of Tax Defaulters under the provisions of Section 1086 of the Taxes Consolidation Act, 1997, as amended. The list is published in two parts:

Part 1: Court Penalty Determinations and Court imposed fine, imprisonment or other penalty

Court penalty determinations are published where a taxpayer has not made a qualifying disclosure, the Court determined penalty exceeds 15% of the total tax, and the total of the tax, interest and penalty is more than €35,000.

All cases where a fine, imprisonment or other Court penalty is imposed by a Court, in respect of a tax or duty offence, are published.

Part 2: Accepted Settlements (and Settlements deemed to be agreed due to full payment)

Where a taxpayer has voluntarily furnished complete information relating to undisclosed tax liabilities and paid the tax and interest due (made a qualifying disclosure of tax defaults), settlements are not published.

Since 1 May 2017, significant changes and restrictions have come into effect where the case involves matters outside the Republic of Ireland, or 'offshore matters'. These changes limit the opportunity to make a 'qualifying disclosure' and coincide with increased international co-operation whereby Revenue gets more and more information automatically from other jurisdictions.

Legislation introduced in the Finance Act 2016 obliges Revenue to identify settlements where the person has failed to pay within the relevant period. 

Settlements are not published where the taxpayer has made a qualifying disclosure relating to undisclosed tax, as defined in Section 1077E (1) of the Taxes Consolidation Act 1997, where the settlement amount does not exceed the relevant threshold, currently €35,000, or where the amount of fine or other penalty does not exceed 15% of the amount of tax.

Calculation of Penalties

Where a qualifying disclosure has not been made, Revenu say penalties between 15% and 100% are applied, depending on the category of default and whether or not the taxpayer has cooperated fully with Revenue in the course of enquiries. The categories of default are Deliberate Behaviour or Careless Behaviour.

Deliberate Behaviour involves either a breach of a tax obligation with indicators consistent with intent on the part of the taxpayer or a breach that cannot be explained solely by carelessness
Careless Behaviour involves lack of due care, which results in the incorrect declaration of tax liabilities by a taxpayer, or which results in the making of incorrect repayment claims. The level of penalty may be further reduced having regard to the level of cooperation provided by the taxpayer once the default is uncovered. Full details of the level of penalties applicable to audit settlements are set out in Penalty Table 1 (Paragraph 5.6.2) of the Code.

Innocent errors and adjustments due to different interpretations of legislation

Penalties are not applicable where a tax default is not deliberate or is not attributable in any way to the failure by a taxpayer to take reasonable care to comply with his or her tax obligations. Neither is a penalty applicable where an adjustment to liability arises from differences in the interpretation or the application of legislation, and the taxpayer could reasonably have considered her/his interpretation to be correct.

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