Thursday 24 May 2018

The Punt: Nowhere to hide for tax dodgers, warns Feehily

Josephine Feehily, Chairman of the Revenue Commissioners
Josephine Feehily, Chairman of the Revenue Commissioners
Waterford Wedgwood said trading in the first quarter was consistent with management expectations
Carl McCann, chairman Total Produce Plc

As if we did not fear the tax authorities enough, Revenue chairman Josephine Feehily was rolling out the threats to defaulters yesterday.

The Revenue Commissioners is planning a blitz on 250,000 property owners it believes never paid the household charge.

Many of these will now face having the charge, plus interest and penalties, deducted from their salary.

Just in case anyone was in any doubt, Ms Feehily said: "Anybody who hasn't paid the charge, we will find them. There is an inevitability about this." She was speaking at the launch of Revenue's annual report for 2013.

The boss of the tax authority said that letters were being sent to quarter of a million households it believes are in arrears.

These households are now facing a charge of €213, after penalties and interest have been added to the initial payment.

Over 100,000 of those being targeted pay tax under PAYE and the letters will tell them the Revenue will advise employers to deduct the charge from wage packets.

The report shows the Revenue netted over half a billion euro last year from cases against tax dodgers. Some €548m was recouped in tax, interest and penalties for the Exchequer.

Data published this morning shows there were 484 criminal prosecutions by Revenue and the names of 450 tax defaulters were published.

However, the report showed there was a huge rate of compliance with the contentious local property tax. Some €242m was collected, with 94pc of households complying.

Three-quarters of these filings were made online, while almost one in 10 householders is having the payment deducted at source from their income.

Ms Feehily speaks in refreshingly clear fashion for a public servant.

Tax dodgers, even those not paying the household charge, will have been given reason to think again and might be wise to pay up.

 

State of Wedgewood was crystal clear

With New York-based KPS Capital Partners having bought six Ardagh glass container manufacturing sites in the US as the Irish company completed its acquisition of Verallia North America, The Punt was curious to see how other KPS investments have been performing. In 2009, KPS got what seems like a bargain when it paid just €6m for the intellectual property attached to the collapsed Waterford-Wedgwood group. The business has been doing well for KPS since then.

Here's the 2012 take Mike Psaros, KPS managing partner, gave on the glass and tableware business when interviewed by 'Private Equity International': "I've spent 22 years – that's half my life – immersed in turning around troubled or underperforming businesses," he said. "And I can tell you unequivocally: I have never seen a company that was as poorly run as Waterford Wedgwood. In many cases with a turnaround you have a marketing problem, or a strategic problem, or maybe a combination of both. This was a case where every single aspect of the business was broken."

Ouch. "You had three magic brand names, each with a 200-year heritage, and you had spectacular products that were selling in 80 countries around the world – despite it being the worst-run business I'd encountered in two decades. That really speaks to the power of the brands," he added. Crystal clear.

 

Only way is up for Total Produce despite pay cuts

Total Produce's top people took pay cuts in 2013, the company's latest annual accounts reveal. Three of the company's four executive directors took home less last year than they did in 2012.

Chief executive Rory Byrne's pay fell from €906,000 to €897,000, now-retired Frank Gernon's pay was down from €559,000 to €336,000 (though this reflected his stepping down from the company in July 2013), and financial director Frank Davis's remuneration dropped from €588,000 to €563,000.

Chairman Carl McCann was the only executive director to receive a boost in pay last year, the food supplier's annual accounts reveal – but this related to an increase in the time he devoted to Total Produce. Mr McCann took home a total pay package of €712,000 in 2013, up from €623,000 the year before.

Despite what these falls in pay suggest, the company's 2013 results were well received. Sales rose by 13pc to €3.2bn while pre-tax profit saw similar increases, up 12.5pc to €52.9m.

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