The following is the text of a statement issued last night by the Fine Gael party:
Following his appointment as party leader on 9th February 2001, Mr Michael Noonan TD terminated all corporate funding to Fine Gael and initiated a full review of the party's financial affairs. On 27th March, 2001 he was briefed by the party's professional advisers on the initial results of the review and he instructed that one matter outstanding with the Revenue Commissioners be finalised as a matter of urgency.
In recent days the party has received a number of press queries regarding its taxation affairs.
The party is advised that its taxation affairs are fully up to date and no arrears are due to the Revenue Commissioners.
We detail hereunder the two issues which have been the subject of correspondence and discussion between Fine Gael and the Revenue Commissioners in recent years. These were the so-called pick-me-up (PMU) arrangements and the payment of PAYE/PRSI liabilities on small overtime and bonus payments made to staff in the period 1989/90 to 1995. The position in relation to each of these is as follows:
The so-called PMU arrangements involve goods/services being supplied to political parties but invoiced to individuals/ companies who are party supporters.
The Revenue Commissioners wrote to Fine Gael on 22nd June, 1998 outlining that an inquiry had been initiated into media reports of such arrangements used by political parties. Fine Gael was asked for its observations in this regard. Fine Gael responded the following day, 23rd June, 1998, confirming that no such arrangements were currently in place and undertaking to investigate whether such arrangements had been used as a means of financial support in the past. On July 20th, 1998 the party confirmed to the Revenue Commissioners that payments totalling approximately £90,000 had been made in respect of goods/ services on behalf of the party. These payments had been made in calendar years 1989, 1994 and 1995.
The realisation by the party that the relevant invoices were not reflected in its books and records prompted the party to ask its professional advisers to carry out an investigation into PMU arrangements. The party's advisers communicated with the suppliers of goods/services to the party dating back to 1st January, 1989 seeking information in relation to PMU arrangements. No additional payments of this nature were identified following this review carried over a period of more than six months.
Fine Gael wrote to the Revenue Commissioners on 1st April, 1999 informing them that following this extensive review no further evidence of PMU payments had been uncovered but should any further information become available, the Revenue Commissioners would be informed directly. The Revenue Commissioners responded to this letter on 6th August, 1999 confirming that their investigation was continuing and that the party would be contacted again in due course.
No further communication from the Revenue Commissioners has been subsequently received in this regard. The party understands that the Revenue Commissioners have reached settlement with companies/individuals identified as having supported the party in this way.
While dealing with the PMU issue, the party asked its advisers to conduct an examination of accounts and records to establish if there was any other information which should be brought to the attention of the Revenue Commissioners .
PAYE/PRSI liabilities relating to petty cash payments made in respect of staff overtime, Christmas bonuses and payments to temporary labour were identified. However, it proved impossible to identify precisely when this practice commenced and who had authorised it. The practice was terminated in July 1995.
The advisers were asked to quantify the extent of potential PAYE/PRSI liabilities accruing to the party as a result of this practice with a view to making a full voluntary disclosure to and settlement with the Revenue Commissioners. PAYE/PRSI arrears totalling £57,731 over nine tax years were identified and following voluntary disclosure, interest in the amount of £50,492 and negotiated penalties at 5 per cent in the amount of £2,887 were agreed with the Revenue Commissioners. £100,000 was paid on account on 1st April, 1999 with a balancing payment of £11,110 made to the Revenue Commissioners on the basis of a full voluntary disclosure and full cooperation on 3rd June, 1999.
The voluntary disclosure was for a period of nine years, covering the tax years 1989/90 to 1997/98, as agreed with the Revenue Commissioners and represented a complete disclosure for a period in excess of the statutory period for the retention of financial records.
Fine Gael received a letter from the Revenue Commissioners on December 22nd last, more than eighteen months after the settlement payment, requesting certain additional details surrounding the party's PAYE/PRSI affairs. Following a further review of party records, a full reply was sent to the Revenue Commissioners on April 27th last. The Revenue Commissioners maintain that the party's tax compliance status was under inquiry before the voluntary disclosure by the party. The party's advisers strongly disagree with the Revenue's contention and have advised that, as all tax, interest and negotiated penalties have been paid in full, the party has no outstanding tax liability.