State likely to lose out on €3m VAT ruling against Ross firms

The State is likely to lose out on a €3 million judgment against companies connected to developer Séamus Ross. It appears Revenue will not be able to claim almost €3 million in VAT from Andiamo Properties, a company formerly under the directorship of Mr Ross.

Andiamo Properties said it could no longer continue due to its liabilities after the High Court ruled against it in a judicial review on a VAT liability of €2.93 million related to two developments in Co Dublin.

Andiamo lost the review in the High Court after Revenue challenged an arrangement set up by it and Drumloe Properties, that had the effect of avoiding VAT liability on proceeds from site sales at developments at Taylor’s Hill, Rathfarnham, and Applewood, Swords.

Revenue originally issued a VAT assessment of €2.93 million to Andiamo in 2005 but the High Court only ruled on the issue early last year.

Stephen Tennant of Grant Thornton has since been appointed as the liquidator for the winding up of the company.

Completely insolvent

“As liquidators, seeing as the company is completely insolvent, we have no funds,” Ken Gannon of Grant Thornton said, “so we won’t be continuing with the appeal, but ultimately it makes no real difference if the Revenue were successful, as there wouldn’t be any money left to pay it.”

It is unclear if Revenue will try to claim the €2.93 million owed to it in the winding-up of the company, a process in which fixed charge holders and liquidators’ fees have preference over uncollected VAT.

Revenue wrote off €138 million in liquidation cases in 2011 as 1,365 companies were wound up in creditor voluntary liquidations, a decrease from €158 million in 2010.

Andiamo’s two shareholders are Raburn Investments Unlimited and Raburn Holdings Limited, which hold 99 and 1 per cent of its shares respectively. Mr Ross and Michael Keogh are also directors of the Jersey-registered shareholders.

Mr Ross stepped down as director and company secretary of Andiamo at the end of last October after the High Court ruling but before the decision was taken to wind the company up.