'Black economy' boss jailed for tax dodging
A director of a cleaning company who paid cash to staff who were also claiming social welfare was jailed for two years for tax evasion yesterday.
Barry McDonald (62) was warned by a judge that everyone in Ireland has to pay their taxes -- and his offences involved a considerable loss to the Revenue Commissioners over a nine-year period.
At Cork Circuit Criminal Judge Patrick Moran was told that by hiring workers who were on social welfare and giving them off-the-books cash payments, Mr McDonald secured a critical advantage over his competitors.
The businessman had previously claimed he found it very difficult to recruit staff and compete with foreign firms in the specialised field of contract cleaning for factories and chemical plants.
"It was very demanding. It was very hard to get people to work.
"You had to pay them cash. (I am) not proud of the practice," the court heard in one submission.
McDonald also claimed that in some cases payments were made to try to secure specific contracts. "Backhanders had to be paid," he said in a court submission.
McDonald, of Factory Hill, Kilcoolishal, Glanmire, Co Cork, was assessed as owing €343,000 to the Revenue Commissioners -- but has managed to pay back €44,000.
The taxes related to a period from 1998-2007. His firm -- which ceased trading in 2009 -- also owes the Revenue Commissioners €274,000 in outstanding VAT and PAYE.
"The company does not trade and is effectively worthless," Don McCarthy, prosecuting, said.
Tom Power, defending, said his client had "lost everything" after the collapse of his firm.
"He is not retired. He is just out of business," Mr Power said.
The court heard that McDonald never lived a lavish lifestyle -- and had effectively focused all his energies on his firm.
McDonald admitted to 13 charges in relation to tax offences, including offences in relation to the payment of VAT, corporation tax, failing to keep records and filing three incorrect personal tax returns.
A total of 10 charges were brought against the company.
Mr Power pleaded for a non-custodial sentence citing his client's early guilty plea, his attempts to repay the taxes, his lack of previous convictions, his age and his health.
But there were emotional scenes when Judge Moran, citing Supreme Court and Court of Criminal Appeal statements on tax evasion matters, warned that he had to impose a custodial sentence.
A female member of the McDonald family began sobbing in the public gallery and shouted out: "Oh Jesus."
The accused bowed his head but remained emotionless in the dock as Judge Moran jailed him for three years, with the final 12 months being suspended.
As Mr McDonald was being led away , his son jumped to his feet and called out: "We all love you Dad."
The distraught woman later had to be helped from the courtroom by family members.