Revenue nets record €700m in pursuit of hot money

The Revenue Commissioners netted a record €700 million from special investigations last year, the bulk of it from targeting undeclared assets held offshore. It has warned that it will vigorously pursue errant taxpayers this year and will step up the number of prosecutions it takes.

The €700 million figure exceeds the €650 million netted by the Exchequer in 2003 from the pursuit of hot money and brings the Revenue's total haul from special investigations to €1.625 billion at the end of 2004. A further €54 million has been paid in tax interest and penalties in the first five months of 2005.

At the end of May, the investigation into bogus non-resident accounts had yielded €808 million, including €356 million to date from 8,300 taxpayers who failed to avail of the voluntary disclosure period.

The examination of 452 cases in connection with the National Irish Bank/Clerical Medical Insurance investigation had seen errant taxpayers paying over €54.1 million from 298 cases.

Tribunals have yielded €34.8 million from 16 cases while 96 Ansbacher Deposit cases have seen payments of €47.8 million paid to the Exchequer.

Revenue Commissioners chairman Frank Daly said the pursuit of those involved with Ansbacher was proceeding only slowly. "Ansbacher will trundle on for some time yet but we will stick with it for as long as necessary," he said.

However, the investigation into offshore assets is likely to dominate this year. Already, the Revenue has netted €734.2 million from the first phase of this investigation - largely from those who came forward voluntarily. "Those individuals who failed to avail of the voluntary disclosure scheme are now the focus of our attention," said Mr Daly.

About 10,000 people have also come forward to acknowledge some liability to tax on undeclared income in life assurance products.

The deadline for payment of tax due is late July and Mr Daly said it was impossible to assess how much this inquiry would produce in tax interest and penalties at this early stage. Mr Daly hailed the success of the investigations at the publication yesterday of the Revenue's annual report for 2004.

"The investigations into a legacy of tax evasion in a number of areas have been highly successful this year once again," he said.

He noted that the levels of voluntary disclosure on the investigation into offshore accounts launched last year was significantly higher than was the case with the probe into bogus non-resident accounts. "The message has hit home that Revenue will pursue those who do not come forward and those who decided to ignore the warnings will unfortunately count the cost."

Mr Daly also said the tax authorities were escalating the number of prosecutions of individuals for serious tax evasion. "I think 2005 will be a very successful year for prosecutions," he said, noting that, at the end of 2004, there were 44 cases under investigation - the highest number to date. The Revenue has, for the first time, set up a division dedicated specifically to pursuing prosecutions.

"It is a new emphasis for us to go after a lot of prosecutions in relation to tax evasion," said Mr Daly, although he conceded that Revenue would always settle many cases without resorting to the courts.

Defending Revenue's policy to pursue "legacy investigations", he said there could never be an option "of walking away from this systemic and widespread [ tax] evasion". He said people who argued that it was "unfair and inequitable to pursue people now for old debts and liabilities" forgot the unfairness and inequity suffered by law-abiding taxpayers and businesses.