‘Duped’ businessman must pay VAT bill of more than €200,000

A “duped” businessman who allowed others to use his bank account and VAT number for importing and exporting vehicles to and from the UK must now pay a VAT bill of €202,970.

The Tax Appeals Commission (Tac) upheld a decision by the Criminal Assets Bureau (Cab) to serve the tax bill in December, 2020, on the owner of a car sales operation concerning the VAT period from January to end of June, 2017.

In his findings, commissioner Andrew Feighery noted that the businessman felt “duped” by the promoters, or car dealers in the locality, with whom he acted in tandem.

Irish entities

However, Mr Feighery said that he agrees with Cab that “ignorance of the law is no excuse”.

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In 2017, 70 vehicles were purchased in the businessman’s bank account name from UK VAT-registered entities and 52 were subsequently sold to Irish entities resulting in the VAT bill.

Mr Feighery noted that while the businessman did not benefit from the transactions, it was CAB who first contacted him in relation to his taxation affairs.

Following his deal with the car dealers, the businessman allowed his accounts to show that he was in receipt of £1.4 million worth of zero-rated EU acquisitions and made Irish motor sales of £766,700 (€874,559) resulting in the VAT bill.

The businessman, who is involved in car sales and recovery, told the Tac that he was approached by a friend in 2016 regarding a perceived business opportunity and the nature of the business was that he was to collect various motor vehicles and drive them to a storage yard.

In return for providing this service, the appellant was advised that he would be paid the sum of £250 per vehicle collected and delivered by him.

As part of the arrangement, the businessman was to provide the promoters with his VAT number and full access to electronic banking rights to the two bank accounts he opened in his name.

This access permitted the promoters to view the bank account transactions online and make lodgements/withdrawals to/from that account.

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The businessman became concerned about the nature of the business when bank statements in his name began arriving in the post to his home address which showed large amounts of money being lodged and transferred into his sterling account.

The appellant’s representative submitted that these transactions were conducted without his client’s knowledge or consent.

Cab request

The representative told the Tac that his client felt he was “duped” by the promoters as he had not agreed that the bank account could be used for the purposes it evidently was being used for.

In early April 2017, Cab requested the businessman to attend an interview to discuss his financial and taxation affairs.

After the interview with Cab where he fully co-operated, the businessman dissociated himself from the promoters, ceased the business, closed the associated bank accounts and deregistered for VAT in April 2017.

Counsel for Cab submitted that there was no defence to the obligations to pay tax liabilities due to the businessman’s “alleged misguided trust in providing the promoters with control over his bank accounts”.