20 months for builder who evaded €500,000 tax over eight years

A building contractor who evaded €500,000 tax over over eight years has been jailed for 20 months by Judge Martin Nolan at Dublin Circuit Criminal Court.

Colm Perry (aged 44) settled €499,998 of unpaid income tax and VAT returns with the Revenue Commissioners last week, but has a further €925,000 of outstanding interest and penalties accumulated on the failed returns from 1996 to 2004.

The separated father-of-three pleaded guilty to 99 counts of tax evasion including failure to remit VAT and return income tax, failure to keep proper business records and issuing incorrect invoices to several high-profile clients such as Windmill Lane Pictures Ltd and the Merrion Hotel.

Perry, of Nephin Road, Cabra issued invoices in the name of a bogus company, Colm F Perry Ltd, and charged VAT on them using a a false Revenue registration number.

Judge Nolan described him as "a decent man" and said: "I accept that his problems started off as a small acorn and turned into a mighty oak of tax evasion."

Ms Sheila Hanley, an Inspector of Taxes, revealed that the Revenue Commissioners ran an identity check on Colm F Perry Ltd and found it was using a VAT registration number for a company which had been struck off the companies’ register in 1999.

She said the revenue made this check when Windmill Lane Pictures Ltd wished to reclaim VAT from a IR£493,000 construction job which Perry undertook in 2001, trading as Colm F Perry Ltd.

Ms Hanley told prosecution counsel, Mr Dominic McGinn BL, that the VAT registration number listed on Perry’s invoice was for Riverstream Developments Ltd, set up by Perry in 1992 but struck off the companies’ register for failing to return tax.

She said three Revenue officers raided Perry’s premises on September 26, 2004 and seized a computer containing business and banking records and a "significant client base" which included Windmill Lane Pictures Ltd, The K Club Golf and Spa Hotel and TV3.

The banking records revealed that Perry opened a Permanent TSB savings account on Grafton Street in 1993 and a similar savings account in Jersey in 1995.

He deposited the equivalent of €438,000 into the Jersey account through his Permanent TSB account in 1998 and used €317,000 of this to buy his Nephin Road home mortgage free. He also bought three insurance products totalling €155, 000 around the same time.

Ms Hanley told Mr McGinn that Perry purchased property in Spain with his ex-wife shortly after opening a Spanish bank account in 2003 and added: "To this day, I don’t know how much he paid for that house."

She said Perry’s annual business turn-over never dropped below €560,000 from 1998 to 2004 but records showed he never returned any VAT, income tax, PAYE or PRSI for his two permanent staff and several casual workers, nor did he pay rent tax when he let out his Nephin Road house.

Perry’s €120,467 of unpaid VAT and €269,763 unpaid income tax between 1996 and 2004 accumulated €925,000 of outstanding interest and penalties.

Ms Hanley agreed with defence counsel, Mr Seán Guerin BL, that Perry, who has been fully tax compliant since 2005 and has no previous convictions, paid the Revenue €109,768 of his staff’s outstanding tax liability which he should have deducted as PAYE.

She agreed that his gross sales had dropped from €120,000 per month to €20,000 due to the construction industry decline and that his available assets are the Spanish property, his Dublin home, his van, a small amount of money in the Spanish bank account and his €107,000 pension fund.

Mr Guerin asked the judge to postpone finalising the sentence to give Perry time to deal with his outstanding tax liabilities and penalties.

He submitted that Perry’s talent for his work was not matched by business administration ability and though he started out with the "intention of doing things right", his tax problems "snowballed" over the years.

Mr Guerin outlined that the "usual deviousness accompanying tax evasion or fraud is not present in this case" because his client traded under a minor derivative of his own name and co-operated fully with the Revenue Commissioners investigation.

Judge Nolan accepted Mr Guerin’s submission that Perry was "a hard working, decent man" but said he had to impose a custodial sentence to reflect the scale of his eight-year tax evasion.