Tax evader insurance schemes expected to yield €400m

The Revenue Commissioners are expecting to receive more than €400 million over the coming weeks through voluntary disclosures from 8,000 people who evaded tax through single premium insurance schemes.

Yesterday, chairman of the Revenue Commissioners Frank Daly revealed that 10,000 people had indicated they might have tax issues relating to the products, following an intensive publicity campaign in recent months.

To date 1,972 people have made payments totalling €106 million. The largest single payment was €3 million, while the smallest was €32.

Mr Daly said that while he could not predict the final total from voluntary disclosures, he expected that 8,000 of the 10,000 people who indicated that they might have issues will eventually make payments.

He said that predicting a final amount would be "quite speculative". However, previous investigations have seen disclosures averaging out at around €50,000 per person, suggesting the likely final amount under voluntary disclosure will be close to €400 million. The closing date for receipt of payments under the voluntary disclosure is today.

The Revenue Commissioners are to begin the second stage of their investigation into single premium insurance products in the coming months, which involves a trawl through detailed records of financial institutions which sold them.

Under new powers, the Revenue has been granted a High Court order relating to one institution, and is in the process of obtaining orders relating to a further two institutions. Mr Daly said officials had been receiving co-operation from the banks relating to the orders.

Because of the number of products involved, the Revenue Commissioners intend to firstly carry out a "sampling" process to identify the number of potential cases where no disclosure has been made and where they intend to investigate.

More than €32 billion worth of single premium insurance business was written during the 1980s and 1990s, Mr Daly said, involving 700,000 separate policies.

He said a considerable number of these were not under the remit of the investigation as they were written in relation to foreign-based companies.

It was also believed that a considerable number of the policies were "repeat" business involving the same money reinvested in a different product.

Mr Daly also revealed that the separate investigations by the Revenue Commissioners had netted more than €1.8 billion to date.

This included €49.8 million from the Ansbacher investigation, €34.8 million from tribunals, €814.2 million from the Dirt inquiry and €747.2 million from the investigation into offshore accounts.

He said that the Dirt inquiry, now nearly six years old, was nearly 98 per cent complete.

Mr Daly also moved to reassure members of the Public Accounts Committee that older people and those with limited means would not be unfairly targeted by the current insurance product investigation.

He acknowledged that most of the single insurance premium products were legitimate and that many legitimate investors were contacted by financial institutions about the products.

He revealed that he had received such a letter himself in relation to a product he had invested in legitimately. He said it "should be of some comfort" to others who received similar letters.

He said that a €20,000 threshold limit would continue to apply relating to policies it would investigate. He told Fianna Fáil TD John Curran that the Revenue would not target family homes, but said that people with other assets who did not have cash to settle their tax bills might have to sell them. "We can't ignore the fact that the assets were acquired from [ unpaid tax]," he said.

Under questioning from Fine Gael TD Tom Hayes, Mr Daly said the Revenue had decided not to put an upper age limit on pursuing people for tax, as it could encourage people to continue to avoid tax until they reached that upper limit.