Tax evasion ‘widespread’ among self-assessed

THE self-assessment tax system for the self-employed has been criticised after it emerged an audit of 47 barristers in 2007 yielded e838,000 in undeclared tax, interest and penalties.

Members of the Dáil Public Accounts Committee also expressed concern yesterday about the lack of effective deterrents against tax evaders after the Revenue Commissioners admitted only one person has been jailed for tax offences since 2003.

Asked during a committee meeting what area caused her most concern about non-compliance with tax, Revenue chairman Josephine Feehily replied: “The cash economy — everything from tradesmen to barristers.”

She then revealed how a small audit of barristers living in Dublin 4 in 2007 had netted an additional e838,000 for Revenue.

Labour TD Roisín Shortall said this was evidence of widespread tax evasion among people using self-assessment.

Ms Shortall also expressed amazement at how almost everyone given a custodial sentence after being convicted of a serious tax offence had their term of imprisonment suspended. “There is no significant deterrent effect if people are not ending up behind bars.”

She said “an Irish Lester Piggott” was needed to send out a strong message on the need for tax compliance — a reference to the champion jockey who was sentenced to three years in jail in Britain in 1987 for tax offences.

PAC chairman Bernard Allen TD said he would be very frustrated and angry if he was the head of Revenue that tax evaders were able to “walk away scot free” from the courts.

However, Ms Feehily said 2008 had been the most successful year ever for criminal prosecutions taken against tax evaders.

Revenue secured 15 convictions for serious tax offences last year compared with nine in 2007.

She admitted only one person was jailed as a result of successful prosecutions initiated by the Revenue over the past six years. Damian Biddulph, from Santry, was sentenced to three years in jail, with two and a half years suspended, after being convicted last November of 12 charges related to non-payment of taxes.

Ms Feehily said the largest fine for tax offences was also handed down last year when Cappoquin Civil Engineering was fined e960,000 after conviction on 32 tax charges.

There were 1,263 convictions at district court level during 2008 relating to the non-filing of tax returns, while there were 500 summary convictions for customs and excise-related offences.