Medical consultant claimed wage to child as expense

Niall Cody was outlining the findings of a Revenue investigation into the tax affairs of medical consultants to the Public Accounts Committee yesterday.

Mr Cody told the committee that a total of €61m has been yielded by Revenue following a tax review of more than 800 medical consultants.

The €61m came from the cases of 276 consultants who had incorporated their private medical practices and, in some incidences, had set up more than one company.

He said Revenue uncovered a “tax planning strategy” being used by some medical consultants after a routine audit of one in 2010.

“With schemes like this, the experience tends to be that a number of advisors develop the scheme and then market it to clients,” Mr Cody told the committee.

He explained that a report was being prepared and that while guidelines would be published later this month, the full report would not in case it highlighted loopholes in the law.

Mr Cody did, however, outline incidences of tax avoidance by some medical consultants.

“When you have essentially wages for children, underage children [being claimed as expenses], I think one of the cases we’ve seen was for work on their website because the child was proficient in IT and the consultant wasn’t,” he said.

“These are the kinds of things we’ve to deal with.

“When we’re dealing with a scheme like this that’s constructed by professionals, part of the challenge is that some people tend to, to borrow an agricultural term, lump everything in to get the maximum and to minimise the amount of tax.”

The chairman of Revenue was asked if claiming expenses in this manner amounted to avoidance or evasion.

“If people are claiming expenses that haven’t been paid, if you didn’t have an expense and you claimed that expense, that’s not avoidance,” he added.

Mr Cody said, “private home expenses are not business expenses.”

He added that in some of the cases Revenue examined went “beyond avoidance.”

The chairman of the committee was then asked if the tax planning strategy used by some medical consultants had been implemented by professionals in other industries that Revenue had audited.

“This group stands out, absolutely,” Mr Cody said.

To date, some 36 medical consultant cases have been published on the Revenue’s list of tax defaulters.