Revenue's tax clampdown on medical consultants yields €48.7 million

Comptroller urges review of delays in settlements and how penalties are calculated

30th September, 2016
Counting the cost. Pic: Pixabay

A nationwide Revenue review of the tax affairs of medical consultants yielded €48.7 million in tax, interest and penalties.

The swoop covered 235 consultants and 29 names have been published on a defaulters' list, according to the Comptroller's report for 2015.

Revenue concerns since 2010 about a tax planning strategy being used in the medical profession led them to open 763 medical consultant cases.

The strategy centred around the incorporation of a new company by the consultant and the transfer of business to that company.

In April 2012 Revenue consulted senior counsel on the legal issues arising from the matter.

On receipt on the final legal opinion in March 2013 Revenue proceeded to throw the net nationwide

The Revenue probe centred on issues of goodwill; capital gains charges; non-business expenditure such as wages for under-age family members and non-business related employees such as nannies and housekeepers; the inclusion of deferred income; and inter-agency transactions for services provided.

Of these probes, 403 were closed by June this year.

Just over half of the cases (20) took over six months to close, with three of those cases taking over four years to close.

The Comptroller urged a review of both the causes of possible delays and possible steps to avoid such in the future.

District Managers should consult regularly with audit managers in reviewing the cases, the report says.

The accounting officer pointed out that as part of his examination, there was a review of interest and penalties for ten of the 37 cases.

The report notes variances in two of the ten cases and calls on Revenue to review its procedures in ensuring correct calculation of interest and penalties.

It further recommends that Revenue should ensure that all of the requirements of a tax settlement, including the necessity for any adjustments to financial statements, are formally communicated to the taxpayer in writing.

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