After collating the data published on tax defaulters available from the Revenue Commissioners it has been possible to track some additional trends to those reported in The Irish Examiner and looked at here.
First up we can examiner the number of cases reported each quarter from 2001: Q4 to 2009: Q3
As can be seen the numbers were below 100 for the first five quarters in the same and then shot up as the investigation in the bogus non-resident accounts (DIRT evasion) reached a conclusion. Since then the number has shown a gradual downward trend and figures are now back to 2001 levels.
Although the number of published defaulters may be trending downward the average settlement has been rising.
The average settlement started out below €100,000. The average settlement in 2009 Q3 was just below €250,000.
The total settlement is made up of two elements:
- The amount of tax outstanding
- The level of interest and penalties imposed
A clear pattern from the data is that the total settlement is determined as much by the interest and penalties as it is by the amount of the tax. Over the 32 quarters in the sample, the Revenue established that there was €355.5 million in evaded tax due. The total settlements made by the 4,959 defaulters total €867.6 million. The difference of €541.1 million is due to interest and penalties.
The interest and penalties imposed are 160% of the total amount of tax due. There were some cases where the interest and penalties were some 700% greater than the original amount of tax due. In one case, €75,000 in tax was due but the total settlement was nearly €600,000 as a result of the interest and penalties imposed.
Here we see the increase in the total settlements made above the amount of the tax as a result of the interest and penalties. Ouch!
The largest penalty imposed was of €9.7 million on Bovale Developments who had an underpaid tax bill of €12.5 million from a total settlement of €22.2 million.
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