Jail sentence for Vat offences cut in half

A car dealer jailed for four years for failing to pay more than €220,000 in Vat has had his sentence cut to two years on appeal.

John Hughes, aged 56, who lived at Cula Rd, Bray, Co Wicklow, before moving to Nice, France, pleaded guilty at Dublin Circuit Criminal Court to sample counts of failing to pay Vat on 119 second-hand vehicles between Jul 2003 and Feb 2006. Last March, he was sentenced to four years imprisonment by Judge Martin Nolan.

He had no previous convictions and the court heard he had re-paid the outstanding amount of €226,718, along with charges and penalties.

In its judgment yesterday, the Court of Criminal Appeal said the case arose out of a Revenue investigation begun in Nov 2005 when it was discovered he had imported the 119 vehicles, worth a total of €1.27m, on which Vat of €226,718 had not been paid.

Following a Revenue search of his home, he sold his house in France where he lived with his partner and children and moved into an apartment. He got €220,000 from that sale, and also sold a site he owned in France, which he paid over to the Revenue. He also reached a settlement for €795,000 with Revenue for unpaid income tax, capital gains tax, interest and penalties and paid €685,000.

He returned to live in France but ended up being arrested on a European Arrest Warrant issued on behalf of Revenue. He was returned to Ireland and released on a €50,000 bail bond, which was also later used towards discharging his Vat liabilities.

Yesterday, Mr Justice Nial Fennelly, on behalf of a three-judge court, said that while a sentence of imprisonment was warranted given the seriousness of the tax evasion, a four-year sentence was excessive.

Mr Justice Fennelly found the trial judge had committed an error in relation to one matter by discounting very largely or entirely the settlements Hughes had made with the Revenue.

Judge Nolan had twice said that defaulting taxpayers “buy themselves away or out of a custodial sentence.”

The difficulty with Judge Nolan’s remarks was that they appeared to impute to Hughes “an attempt to buy off” his liability to face a sentence, he said. This is not the correct position in law, Mr Justice Fennelly said.

The court did not accept Judge Nolan failed to take account of a wide range of mitigating elements in the case. However, he committed an error in one respect by discounting the settlements Hughes had made and their destructive effects on his finances, his life, capacity to earn and his family, Mr Justice Fennelly said.

The court viewed the four-year sentence as excessive but taking into account his co-operation, rehabilitation and other mitigating factors, it reduced the sentence to two years.