Cork City Council settles €1.3m tax liability

Cork City Council has had to pay over €1.3m to settle additional tax liabilities following a lengthy Revenue audit.

It includes a €654,000 bill relating to benefit-in-kind on 140 council vehicles, the underpayment of PRSI totalling some €259,000, interest of just over €191,000, and penalties of €51,000.

However, City Hall said the settlement was funded by payroll savings achieved due to time-lags in the recruitment process and that it has had no impact on the 2019 budget agreed by council in November.

The Irish Examiner can reveal that the council has made three payments to Revenue totalling €1,351,509 using the unprompted qualifying disclosures process after issues were identified for the period 2014 to 2017. This process can be used if an error is made on tax returns but before a formal Revenue probe starts.

Revenue said it is precluded from commenting on individual tax cases.

City Hall confirmed it was approached by Revenue in October 2016 with a non-audit compliance query — the lowest level of review it carries out.

The council handed over its books for 2014 and launched a self-review for the year which led to an unprompted qualifying disclosure related to the under-calculation of PRSI on JobBridge employees who went on to secure full-time employment with the council in the period 2007 to 2014.

By February 2017, Revenue launched a full audit on the 2014 figures, during which the benefit-in-kind on the council’s fleet was the focus of most queries. The council responded but Revenue rejected its interpretation of the tax legislation.

The council made another unprompted qualifying disclosure — this time for 2015 to 2017 — and made the settlement in three tranches: In November 2016, last May, and in August.

The council said procedures are now in place to ensure there will be no recurrence.

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