A bus painter accused of tax evasion to the tune of over €1.4m says he “just never bothered” to file his returns.
Trevor Dixon (aged 57) has pleaded guilty at Dublin Circuit Criminal Court to 26 sample counts relating to tax evasion between 2002 and 2008, while he worked spray-painting Dublin buses.
Dixon, of Hazelwood, Shankill, Co Dublin, faced counts of issuing incorrect VAT invoices, fraudulently evading income tax, failing to file tax returns and failing to pay VAT.
Aidan Murphy, a senior investigating officer with Revenue, told Shane Costello BL, prosecuting, that suspicions arose about Dixon's tax affairs in 2008.
Officials realised that Dixon had ceased being registered for income tax in 1990.
When Revenue asked him about his employment status for the period 2002 to 2008, Dixon said he had been employed in part-time contract work for Freeney Graphics, spray-painting Dublin buses.
Revenue officials noted that during the same period, sums totalling €1.69m had been lodged into two bank accounts belonging to Dixon and his wife.
Freeney Graphics were contacted by Revenue and said they had employed Dixon between 1999 and 2004 as a subcontractor, and between 2004 and 2008 as a full employee of the company.
They said Dixon had submitted invoices to them for the entire period, including claims for VAT payable at the higher rate of 21%.
Freeney Graphics paid the VAT to Dixon, then reclaimed it from the State.
Between 2004 and 2008, Freeney Graphics paid the VAT to Dixon but retained some of it under the Relevant Contracts System.
In April 2010, Revenue officials searched Dixon's home, seizing a computer hard drive and a large number of hard copy invoices.
Dixon accepted that he had failed to register for VAT or submit VAT, even though he submitted invoices claiming VAT.
“I just never bothered. I didn't have an accountant; I have now,” he told officials.
Mr Murphy told the court that Dixon owed income tax of €532,582 from between 2002 and 2008, plus a surcharge of 10% at €53,258.
He also owed €306,399 in VAT claimed but not remitted, and €519,659 in interest on these debts.
In total, Revenue said Dixon owed €1,409,119 to the State.
However, Laurence Masterson BL, defending, said that in fact, the figure Dixon really owes is only €61,670.
Mr Masterson said Revenue had failed to take into account his client's “very significant” outgoings.
“All of his income has been bundled together as a taxable sum, with no regard to the tax he paid or his expenditure as a contractor. He paid for all the paint and the equipment,” he said.
The court heard that Dixon had two employees whom he paid in cash.
Mr Masterson said that between 2004 and 2008 when Dixon was an employee of Freeney Graphics, he paid a flat rate of 35 per cent in income tax totalling €451,535.
This money, known as Relevant Contracts Tax or RCT, was retained by his employer and paid to Revenue.
Mr Masterson said that when RCT was introduced, it came as a “great relief” to his client as he thought he was now meeting his tax obligations.
“He carried blithely on, under an utter misconception as to what his obligations were. His book-keeping was chaotic and naïve, but it was to his own detriment as well as to the detriment of the State as he forwent the opportunity to reclaim taxes,” he said of his client.
He said Dixon had not had the financial resources to hire an accountant until this summer, when he managed to sell the last of some vintage motorbikes he had restored.
Dixon lost his job in 2009 when it came to light that his tax affairs were not in order.
A married man with two grown-up children, he is currently unemployed apart from small bits of work on motorbikes. He does not claim social welfare.
Mr Masterson said employment opportunities including painting aircraft could be available abroad. He described Dixon is “an expert and a craftsman” in his area of painting.
He said Dixon paid the entirety of his €80,000 pension to Revenue in 2010 to help regularise his affairs.
However Mr Murphy responded, “That's news to me.”
Judge Mary Ellen Ring adjourned the matter to give the State time to ascertain whether or not Dixon's pension had in fact been surrendered to Revenue.
When Mr Masterson said his client was not a threat to the community and “a person of great affability”, Judge Ring remarked that there are a lot of people in custody who are very affable.
She remanded Dixon in custody until December 3.