Economy

Last orders finished a bust publican, perhaps now the taxman should let it go

Cantillon: A domino effect, with Revenue a key player, left the McPartlands with nothing

Eileen and Séamus McPartland outside Fallon’s in Dublin. Photograph: Nick Bradshaw

Sat Nov 25 2017 - 07:54

The cliché tells us there are two sides to every story. Yet the side of the story told on Friday's Business This Week supplement by the McPartland family, who lost their landmark Fallon's pub in Dublin in an insolvency over debts to the Revenue Commissioners and two banks, was unsettling.

As the family tells it, Séamus McPartland suffered a brain aneurysm leaving him almost blind, sparking lender concerns over his ability to run the pub and to incessant pressure from one of those lenders, Bank of Ireland.

This, Séamus and his wife Eileen say contributed to difficulties keeping up with Revenue, which then withheld tax clearance certs affecting their liquor licence, before it filed a winding-up petition, leading to ACC putting in a receiver: a devastating domino effect that left the family with nothing.

The banks and Revenue, following protocol, would not comment on the case. Still, what might have been the “other side” of the story?

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In hindsight, when a pub gets into trouble, perhaps its owners are better advised to prioritise Revenue over the banks. Revenue, after all, issues the tax certs that publicans must have to remain licensed to sell drink.

But perhaps that cuts to the core of one of the McPartlands’ grievances – that the State was able to use tax clearance certs “as a weapon”.

ACC and BoI held mortgage security over the McPartlands’ assets, ostensibly making them the most important creditors. But even though Revenue was an unsecured creditor, in practice it had an indirect form of the most unassailable security imaginable: no tax cert means no licence to operate. For a publican, no licence means game over.

Revenue’s liquidator pursued unsuccessful restriction proceedings against the McPartlands, despite their audited accounts suggesting there was no issue. What was the point of that?

The banks and Revenue – and everybody else, include a phalanx of insolvency practitioners – were fully paid in the forced pub sale. Yet, almost unbelievably, Revenue is still pursuing the McPartlands over historical director’s tax-free allowances.

To what end? The McPartlands have had to let go. In this case, perhaps the State should, too.

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