University of Limerick pays out €110k tax settlement for contract error

The University of Limerick made a tax settlement in excess of €110,000 to Revenue last year over a mix-up in how it deducted tax from contractors.

The university said it discovered an error in its treatment of five contractors following a review undertaken to ensure it had made correct PAYE and PRSI returns.

UL claims the mistake arose out of its treatment of the contractors as self-employed instead of employees for tax purposes.

It subsequently made a voluntary disclosure to the tax authorities last April which resulted in the university having to pay PAYE, PRSI, and other levies due for the years 2011 to 2014 together with interest and an agreed minimum penalty which totalled €111,269.

The revelation of the tax settlement is contained in the university’s financial statement for the academic year 2013/14 which has just been published.

“To the best of UL’s knowledge and belief the university is compliant with taxation laws,” said Don Barry, UL president.

A UL spokesperson said the sums involved represent just 0.02% of staff costs.

The university also confirmed it had stopped paying certain allowances in May 2014 to some senior staff.

However, it admitted that €62,595 had been paid in allowances worth €5,500 per annum for the roles of Head of Department, Assistant Dean Research, and Assistant Dean of Academic Affairs where staff were not at the rank of associate professor or professor during a period where such payments were under review by the Department of Education.

UL also acknowledged it had not complied with public procurement guidelines in respect of five instances involving expenditure of €356,000. The guidelines state that all contracts with a value in excess of €25,000 must be put out to tender.

The financial statement revealed that Mr Barry’s salary for the 2013/14 academic year was €179,809.

The college paid overtime of €387,774 to full-time academic staff for working outside their normal contract hours.

UL also revealed it may have a contingent liability over a property transaction indirectly linked to Plassey Trust Company, its 100% owned subsidiary, which oversees the administration of UL’s student village.

Overall UL reported a net surplus for the 2013/14 academic year of €10.4m — an increase of €500,000 over the previous 12-month period.

However, John Field, UL’s director of finance, said financial and operational challenges were presented by the decline in State grant levels which decreased by 2.6% to €35.8m for the financial year ending September 2014.

“The university will have to maintain its focus on non-state income generation and cost control in order to continue to achieve such positive financial outcomes,” said Mr Field.

Overall income for the year was up 4.4% or €9.7m to €229.8m, with income from student fees rising by 2% to €83.7m, while revenue from research jumped by 11.2% to €30.9m. Expenditure rose by €9.2m to €219.4m, with staff costs accounting for €111.7m (up 5.1%), including a severance payment of €150,000 to one employee.

Total staff numbers increased by 122 over the year to 1,580. The university’s net assets are valued at €325m, while its revenue reserves of €97.8m are committed to current and future expenditure.


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