Cork City Council to review fleet operations following €1.3m tax bill

Cork City Council to review fleet operations following €1.3m tax bill

A €1.3m tax bill has forced a local authority to review its fleet operations and replace some vehicles to ensure it can deliver an efficient and cost-effective 24-hour emergency response service.

Cork City Council says it has replaced most of its larger vehicles with two-seater vehicles in the wake of Revenue’s decision on the application of benefit-in-kind (BIK) legislation to its fleet.

And arrangements have also been made to ensure that its remaining three-seater vehicles are parked-up at a central location overnight, rather than be taken home by on-call staff after hours.

The news emerged after the Irish Examiner revealed how the local authority has had to pay €1.3m to settle additional tax liabilities which arose after a lengthy Revenue audit.

After an initial Revenue query to the council in October 2016, Revenue launched a full audit as the council conducted ‘self-reviews’ for the period 2014 to 2017.

Following a series of meetings and negotiations, Revenue rejected the council’s interpretation of tax legislation, which eventually prompted the council to make a series of unprompted qualifying disclosures to settle additional tax liabilities totalling €1.3m.

Most of the liability was linked to the under-calculation of PRSI on JobBridge employees who went on to secure full-time jobs with the council, and to the application of benefit-in-kind to some 140-vehicles in the council fleet.

In a statement, the council said drivers and foremen were allowed to take vehicles home for a "number of operational reasons" to ensure delivery of a 24/7 service in an efficient, cost-effective and flexible manner.

Many of these workers were involved in the coordination of responses to severe weather emergencies or urgent housing-related repairs.

“In delivering services, a high degree of mobility and flexibility is required, for the transportation of both workers and equipment/supplies to various sites,” the council said.

“The council operates and manages a fleet of over 140 vehicles, ranging from light commercial vehicles to small vans.

Previously included in the fleet were estate cars. These were chosen as the most operationally efficient and effective mode of transportation.

But since the Revenue BIK ruling, the council has had to review its fleet operations.

“Vehicles with capacity to carry more than two people are now required to be parked up centrally at night. To retain an appropriate out-of-hours response capacity, it has become necessary for the council to replace the majority of larger vehicles with two-seater vehicles.”

The council 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.

The council said it has conducted an internal review following the audit and has taken the necessary corrective action to ensure full compliance and that procedures have been put in place to ensure there will be no recurrence of the tax issues.

€1.3m breakdown

  • PRSI underpayment relating to JobBridge employees who went on to secure full-time jobs (2007-2014): €259,000
  • Benefit-in-kind tax relating to council fleet: €654,000
  • VAT: €37,000
  • Taxation on outdoor workers’ eating-on-site allowance: €25,000
  • Relevant Contracts Tax: €9,000
  • Payment to ex employees: €7,000 and PRSI: €17,000
  • Professional Services Withholding Tax: €2,000
  • Interest: €191,509
  • Penalties: €51,000

More on this topic

Remaking a city centre: Plan will work if rules enforcedRemaking a city centre: Plan will work if rules enforced

Calls for more enforcement of Cork's Patrick St car banCalls for more enforcement of Cork's Patrick St car ban

Victorian Quarter ‘insult to Tomás MacCurtain’Victorian Quarter ‘insult to Tomás MacCurtain’

Thunder Child II ready for testing ahead of world record attemptThunder Child II ready for testing ahead of world record attempt


More in this Section

Gardaí investigating passport fraud make an arrest in DublinGardaí investigating passport fraud make an arrest in Dublin

Report calls for the abolition of direct provisionReport calls for the abolition of direct provision

Finance Minister 'trying to hide' €24m payment to Aer Lingus and RyanairFinance Minister 'trying to hide' €24m payment to Aer Lingus and Ryanair

NI parties clash over Brexit and Westminster representation during TV debateNI parties clash over Brexit and Westminster representation during TV debate


Lifestyle

Lizzo, Demi Lovato and Ashley Graham are among those prompting us to practise a little more self-love.5 times celebrities reminded us to be body positive in 2019

Wondering about wine for the big day? Leslie Williams has all the options, for every taste and budget.Something from the bar: The perfect drink selections this Christmas

Damon Smith faces the might of the First Order on the exhilarating Star Wars Rise Of The Resistance attraction at Walt Disney World in Orlando.Feeling the Force in Florida: Star Wars Rise Of The Resistance attraction opens at Walt Disney World

There’s nothing better than curling up with a good book over the Christmas holidays, says Kya deLongchamps.By the book: Our top home and interiors picks to curl up with over the festive season

More From The Irish Examiner