Medical consultants hit with tax bills after Revenue probe
Published 23/04/2015 | 02:30
Dozens of medical consultants have been penalised by the Revenue Commissioners for tax evasion in the past year.
Settlements totalling €16m came as part of an ongoing probe into the use of company structures to minimise tax bills.
Revenue officials said the payments were made after 119 "compliance interventions" against individual consultants, their companies, or both.
The average settlement was around €134,000 in taxes, penalties and charges.
A further 160 cases have also been opened - and officials said they expected to conclude "further significant settlements" this year.
The investigation by the taxman began two years ago when it began examining the affairs of consultants who had incorporated their businesses.
It was prompted by concerns that company structures were being used for questionable purposes.
According to the Revenue's annual report for 2014, published yesterday, these practices include:
● The claiming of excessive or incorrect tax deductions in relation to the salaries and pensions of spouses and children.
● Making large expenses claims to get tax deductions, despite having insufficient or no supporting evidence for those expenses.
● Cross-charging between the consultant and their companies that lacked any commercial basis.
● The deferral of professional income to later tax periods.
● The claiming of personal expenses against professional income.
So far, the probe has only focused on the Dublin area, but Revenue officials said they were now widening it out to other parts of the country.
Six of the settlements, involving just under €2m, were published as part of a Revenue tax defaulters list last March.
The largest of these involved Dublin 4-based consultant Desmond Winter. He made a settlement of €477,072 in tax, interest and penalties in a case involving under declaration of income tax.
The Revenue wrote to bodies representing consultants in 2013 highlighting its concerns and warning it was about to launch the investigation.
The widening of the probe comes as Revenue announced plans to recruit an additional 400 staff.
Around 200 of these jobs will be to replace officials who are close to retirement.
Other clampdowns are also planned this year on illegal fuel-smuggling businesses and the use of company structures by individual contractors to minimise tax bills.
More than 400 audits of contracting companies have already been carried out.
Around 300 of these were done last year, yielding €10.5m. Over 80pc of the audits conducted on companies and their directors have resulted in tax settlements.
Revenue chairman Niall Cody also said that tax officials would continue their operations against cash businesses who are avoiding tax liabilities.
Last year Revenue officials identified 437,000 such instances involving cash businesses, yielding €610m.
● 889 audits in the construction industry, yielding over €35m.
● 539 actions against landlords, recovering €22m.
● 729 audits of retail businesses, where nearly €20m was recouped.
● 439 audits of wholesalers, resulting in €14m in taxes being clawed back.
Mr Cody said Revenue had secured 27 criminal prosecutions for serious tax and duty evasion last year.
A further 64 cases were scheduled for prosecution this year.
In addition, 504 criminal convictions were secured for a range of tax and customs and excise offences, as a result of which fines of €1.2m were imposed.