Saturday 18 November 2017

Consultants cough up €15m in unpaid taxes and penalties

Over 50 medical experts each paid a six-figure tax bill last year

The clampdown comes as the HSE faces a massive €350m payout — to compensate hospital consultants — for allegedly failing to honour a salary deal agreed eight years ago. (Stock picture)
The clampdown comes as the HSE faces a massive €350m payout — to compensate hospital consultants — for allegedly failing to honour a salary deal agreed eight years ago. (Stock picture)

Mark O'Regan and Maeve Sheehan

Medical consultants stumped up more than €15m last year in unpaid taxes and penalties as part of a 'blitz' by Revenue on special schemes used to boost incomes.

And new figures secured by the Sunday Independent also show 54 highly paid medics each made a settlement of more than €100,000 in 2016.

Many of the doctors had set up 'controlled companies' which were later found to contain 'aggressive tax-planning' and other avoidance measures. The Revenue authorities are now challenging hundreds of cases which involve transactions they allege have "little or no commercial reality".

Latest data shows the authorities have 318 cases on their books - with a further round of investigations due to begin shortly. In total, some €54.1m has been recovered from 253 consultants and their "connected companies" in the past four years.

The clampdown comes as the HSE faces a massive €350m payout - to compensate hospital consultants - for allegedly failing to honour a salary deal agreed eight years ago.

A detailed breakdown of the figures shows the number of cases involved in this tax investigation into one of the country's highest paid professions have increased dramatically over the past four years.

In 2013, a total of 98 'interventions', which can include a 'profile interview', audit or full scale investigation, were carried by Revenue. Some €510,000 arising from eight cases was recovered by the authorities in unpaid taxes, interest and penalties. One medic made a settlement of more than €100,000.

By September 2016, however, settlements had risen to €15m - with 763 'interventions' launched.

This compares with some €16.9m recovered by Revenue in 2014, when 53 consultants made settlements in excess of €100,000. In 2015, a total of €21.6m was recouped by the tax authorities; 69 medics coughed up repayments exceeding €100,000.

Tax investigators have established that private companies set up by some consultants were used to cut their tax bills by deducting large expenses - which had little to do with direct business activities - and to improperly write off losses against capital gains and other taxes.

Other cases included excessive or incorrect tax deductions claimed in relation to the salaries and pensions of spouses and children.

It was also discovered that some doctors were deferring income to a later tax period, therefore delaying their liability.

It is believed that a number of consultants who were investigated by the Revenue Commissioners were clients of a Dublin accountancy firm, Houlihan Cushnahan.

Four prominent hospital consultants who were named as tax defaulters are suing the firm over the advice they allegedly received from the firm. An informed source said other hospital consultants were considering legal proceedings.

Houlihan Cushnahan did not respond to calls from the Sunday Independent this weekend.

The Revenue probe is believed to have wreaked financial havoc on those consultants who were targeted. One consultant, who declined to be named, told the Sunday Independent he at one point considered selling the family home after being presented with a six-figure tax bill.

Sunday Independent

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