Trouble at the mill

The foothills of the Blackstairs Mountains, on the Carlow-Wexford border, have never witnessed the likes. A sheepdog named Rothko – if you don't mind – after the 20th century American abstract expressionist painter whose canvases sell for tens of millions of dollars.

The frisky black-and-white Collie – acquired from the Inistioge Puppy Rescue – appears untroubled by his quirky moniker. His master is the rather more popular, and certainly more accessible artist Mark O'Neill, who lives in a converted mill-house on the banks of the River Slaney outside the village of Clonegal.

Dewy-eyed puppies. Sun-dappled country kitchens. Secret gardens. Cud-chewing cows. Piebald ponies. Relaxing rustics. Bouquets of summer flowers. Mark O’Neill’s paintings are instantly recognisable and very popular.

As the Taoiseach might put it: “When it comes to art, Paddy knows what he likes and likes what he knows”. This is traditional, realist art – the sort that drives the Modernist crowd nuts and a world away from Rothko’s work – much sought-after by the Irish art-buying public.

He’s one of Ireland’s most successful artists. His paintings frequently appear at auction and are invariably snapped up. Limited edition prints of his most popular paintings regularly sell out. He receives many private commissions, especially for portraits. And, he gives art classes to aspiring painters at his private gallery.

So how, on earth did Mark O’Neill end up on the Revenue Commissioners’ latest list of tax defaulters, published earlier this month, facing a whopping €721,600 settlement for Underdeclaration of Income Tax and VAT following a Revenue audit?

In a kitchen overlooking a Wind in the Willows riverbank, where a millwheel turns eternally and a screaming peacock preens on the lawn, he is happy to explain. But first there's a lunch which he has just "thrown together". A Hiberno-Gallic salad of rocket, bacon, red onion, peppers and roast potatoes – of a quality to rival Restaurant Patrick Guilbaud – is served with brown bread and a chilled Côtes du Rhône, followed by lashings of piping hot espresso, apple tart and cream.

His trouble with the taxman apparently relates to the artists’ exemption (from income tax) in Ireland, which was once unlimited but has been gradually reduced – to a threshold of €40,000 per year in the most recent Budget.

He's vigorously contesting settlement Revenue's settlement and, having consulted a tax expert in Dublin, has filed a complaint to Revenue. However, his belief that the matter will end up in the High Court precludes further comment.

But who, precisely, is Mark O'Neill and how did he end up in this corner of Ireland? Now aged 50, he was "conceived in Nigeria and born, in 1963, in Birkenhead" (northwest England) to Terrence, the son of Irish emigrants from Mitchelstown, Co Cork, and Sheila, a nurse who had emigrated from Co Laois.

His father's job – with the global consumer goods company, Unilever – involved a peripatetic childhood with overseas stints in locations as diverse as Malta, Peru, Nigeria, Mauritius, South Africa and, eh, Drogheda.

When he was 12, the family returned to England and O'Neill went to a Christian Brothers school in Crosby, Liverpool, where he was encouraged by a "brilliant" lay art teacher, Colin Wilkinson, with whom he is still friends.

At art college in the 1980s – in Kingston-upon-Thames in southwest London – he pursued a degree in graphic design. Talent-spotted during his second year by a publishing company, he was commissioned to illustrate book covers for what he calls the best-selling romance novels by Catherine Cookson. A further breakthrough was a commission to design a poster for the film Back to the Future , which meant that he "no longer had to survive on beans".

A subsequent dispute with the publisher, over an alleged copyright infringement of his artwork, resulted in legal proceedings which were settled out-of-court and O’Neill was awarded £14,000.

Tired of London and disillusioned with working as an illustrator, the windfall allowed him to pursue the romantic idea of moving to Ireland – alone. In 1988 he bought a house, “a beautiful collection of stone buildings which were pretty dilapidated”, in the remote village of Killeigh, Co Offaly, where he “lived with mud floors”.

But, he says, the money dried up quickly and he had days when he had to borrow money from friends to pay the electricity bill. He realised that it was time to “get a hold of myself and change my ways”.

He began to scrape a living by teaching art to local schoolchildren and believes he was good, recalling that he "enjoyed teaching and sent a lot students to NCAD the National College of Art and Design ] and different art colleges around the country, where they were totally messed up by the tutors".

His disdain, incidentally, for the critics and academics of the art establishment, who studiously ignore his work while lauding State-subsidised art, is clearly evident: “Why in painting is it a crime to be commercially successful?” he asks rhetorically; and, “Why is craftsmanship ignored?”

While teaching Leaving Cert students, he was “painting for painting’s sake” – rather than creating a commissioned illustration – and enjoying it.

“A few friends saw these paintings” he recalls and they suggested he exhibit them in the local coffee shops and restaurants in Tullamore. So he did. And was absolutely flummoxed when they sold. In a Eureka moment he realised: “Here was the solution; I should be painting pictures.” And he’s been doing so ever since.

Gradually galleries around the country began to stock and sell his work. He submitted a painting to the Royal Hibernian Academy 's Summer Exhibition and won a prize and was taken on by Dublin's Frederick Gallery, where he had sell-out exhibitions. In June 2006, he became the first living Irish artist to sell an entire collection at auction, rather than through a gallery, when Adam's sold all 65 lots of his paintings for a total of €475,000. The art world was agog. Mark O'Neill had arrived.

He continues to supply auctioneers and doesn't sell through galleries – except Treasures in Athlone, Co Westmeath and his own Mill House Gallery. The price depends on subject and size – and the state of the art market. For example, at Adam's in Dublin next Tuesday (March 26th) his painting Lunch Al Fresco is expected to make €3,000 to €5,000. During the boom, prices were rather higher, but the art market has fallen – by 50 per cent and more – since 2008. The highest price ever achieved at auction for one of his paintings was €28,000 – paid for Outside The Fuel Shed – featuring the ubiquitous sheepdogs – at Adam's in June 2007.

His studio – a thatched, former fishing lodge – is a short walk from the house. Dressed in overalls, he sits at his easel and paints under artificial light, mainly from photographs. The only decor is snapshots, taped to the wall, of his parents, who have moved back to Ireland and live in nearby Bunclody. He listens to music while he paints and occasionally takes a break "to watch Judge Judy" on a wall-mounted TV.

Asked to name his favourite painter, he replies, without a moment’s hesitation, John Singer Sargent and points admiringly to the portrait of Lady Agnew adorning the cover of a coffee-table tome devoted to the work of the celebrated American artist.

He also likes the Chilean Claudio Bravo – a painter not to be confused with the South American country’s goalkeeping footballer. And his favourite gallery? The National Portrait Gallery in London.

During the 1990s, he left Co Offaly and moved to live with a partner in Castledermot, Co Kildare, but when that relationship ended he journeyed further south to Co Wexford and bought his current home in 2008.

Mark O’Neill shares the Mill House, effectively a small estate of 70 acres – “half of it in gardens” – with “40 chickens, some guinea fowl and four peacocks” and, in addition to Rothko, two other dogs: dachshunds named Greta and Baby Doll.

He currently lives alone but is hoping that his “new boyfriend”, a lawyer, may move in soon. Rothko’s days as top dog may be numbered.

Despite the gravity of his tax problems, Mark O’Neill is remarkably cheerful and appears to be optimistic of success in his efforts to reverse his liability to the Revenue. But if not, to borrow a phrase from his native northern England, there is likely to be “trouble at t’mill”.

The outcome of his case will be closely watched by other painters, sculptors, writers and composers who benefit from the tax break – originally introduced by Charles Haughey when Minister for Finance in 1969.

The so-called artists’ exemption initially allowed qualifying artists to earn income (without any limit) free of tax on the sale of their work.

The legislation has since been updated and there is now an annual threshold of €40,000, above which income tax is levied. However, it is understood that most artists in Ireland earn less than this amount so the tax issue simply doesn’t arise.

To benefit from the scheme, artists must apply to the Revenue Commissioners, who decide if the work is “generally recognised as having cultural or artistic merit”.

A leading art auctioneer in Dublin, while declining to comment on any specific case, told The Irish Times that: "Some artists who sold well during the boom didn't realise that, although they were exempt from income tax on their earnings, they were liable to VAT on sales".