Revenue has collected close to €75 million from two longstanding investigations into the tax affairs of medical consultants and self-employed contractors, new figures show.
It has reached tax settlements worth €55.96 million with medical consultants after a nationwide review began in 2013.
The tax authority initiated a review of tax-planning strategies by Dublin-based medical consultants in 2010 before widening its scope to a nationwide investigation. A total of 818 cases have been opened by Revenue, 494 of which have been settled.
Revenue’s investigation has recouped €31.69 million in tax in addition to interest payments of €5.66 million and penalties totalling €3.68 million. A tax “uplift” — described by Revenue as tax receipts that “have been saved or will be collected in future” as a result of the its intervention — was also recorded.
A Revenue spokeswoman said it was satisfied that the investigation had “identified, addressed and is continuing to address relevant risks” in respect of the tax affairs of medical consultants.
The inquiry was initiated in response to concerns about consultants’ use of controlled companies to manage their tax affairs. These issues included the purported disposal of goodwill by consultants to their controlled companies; the claiming of personal expenses against professional income; and cross-charges made between consultants and their companies that, according to Revenue, lacked any commercial basis.
Goodwill is an intangible asset that arises as a result of one company acquiring another and takes into account a firm’s name, customers base and employee relations.
Further concerns centred on excessive or incorrect tax deductions being claimed in relation to the salaries or pensions of spouses or children; the deferral of professional income to later tax periods; and a lack of supporting documentation for large expenses claimed as tax deductions.
Some consultants affected by Revenue’s inquiry have taken legal action against a Dublin-based accountancy and consultancy firm that advised them. Revenue closed 197 cases last year which yielded €16.94 million. This compared with 170 finalised cases yielding €21.61 million in 2015.
Replying to a parliamentary question from Michael McGrath, the Fianna Fáil finance spokesman, Michael Noonan, the finance minister, said that further cases could be opened by Revenue this year if required.
A separate Revenue audit of self-employed contractors which began in July 2013 has yielded €18.6 million in additional tax, interest and penalties for the state.
An pilot scheme set up in the southwest of the country in 2012 found that 107 of 119 companies investigated had underpaid taxes by declaring false self-employment and contracting work.
Employers were found to have avoided making national insurance contributions by listing workers as self-employed. This is often done legitimately but Revenue has found evidence of bogus self-employment. Revenue has audited 746 contracting companies and a concluded audits of a further 547 directors of those companies to date. More than 60 cases remain under audit.