Tax Appeals Commission determination 180TACD2020 regarding Income Tax, 2020

• Administrative Decision Number: 180TACD2020
• Year: 2020
• Date: 21 September 2020
• Subject Matter: Income Tax
• Respondent: REVENUE COMMISSIONERS

Ref: 180TACD2020

APPELLANT

BETWEEN/

Appellant

V

REVENUE COMMISSIONERS

Respondent

DETERMINATION

Introduction

1. This is an appeal against assessments, under Chapter 5 of Part 41A Taxes

Consolidation Act 1997, as amended (‘TCA 1997’), to income tax for the tax years

2015 and 2016. This appeal also relates to the operation of section 997A TCA 1997.

2. This Appeal was heard by remote hearing (both Appellant and Respondent attended

by remote computer link) held at the offices of the Tax Appeals Commission on 26

August 2020.

Background

3. The Appellant was jointly assessed with his spouse in the 2015 and 2016 tax years.

4. During 2015 and 2016 the Appellant and his spouse were directors and 100%

shareholders’ in REDACTED (‘the Company’).

5. The Company went into creditors’ voluntary liquidation on REDACTED 2017.

REDACTED was appointed as the liquidator (‘the liquidator’).

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6. PAYE-related taxes, deducted from salaries paid, in the amount of €17,632 were not

remitted by the Company to the Respondent and were outstanding at the date of

liquidation. The Liquidator did not have funds available to pay this and the amount

remained outstanding. These outstanding PAYE-related taxes were related to total

director’s emoluments paid in the amounts of €63,648 for 2015 and €52,166 for

2016.

7. Initially, on 20 November 2018, the Respondent, denied the Appellant the PAYE credit

for his portion (ignoring his wife’s portion) of the unpaid PAYE and raised amended

income tax assessments, pursuant to the provisions of Chapter 5 Part 41A TCA1997

and S.997A TCA1997, on the Appellant in the sum of €4,137 in respect of the 2015

tax year, and in the sum of €1,825 in respect of the 2016 tax year.

8. On 22 November 2018, the Appellant notified the Respondent that he wished to

appeal the initial assessments on the grounds that they were incorrect. The Appellant

submitted that “following amendments to the P35’s for 2015 and 2016, THE

COMPANY has no liability to Revenue for PAYE/PRSI/USC for these years and

therefore S.997A does not apply”.

9. On 22 November 2018, REDACTED (“Agent”) who acted for both the Appellant and

the Company amended, using the ROS system, the P60’s and P35’s thereby reducing

the total director’s emoluments to €30,922 for 2015 and €31,268 for 2016. Both the

Appellant and the Company remained on the list associated with the agent’s TAIN

(Tax Advisor Identification Number) up to 28 November 2018 despite the fact that

the Liquidator had taken control of the Company on REDACTED 2017.

10. The Appellant submitted copies of the “Acknowledgement for P35 Details” (issued by

ROS System), dated 22 November 2018 showing a decrease in the PAYE/USC

amounts due by the Company of €14,279 for 2015 and €7,805 for 2016. This

reduction in liability, if it were accepted by Revenue, would have the effect that no

PAYE/USC relating to director’s emoluments would have been unpaid at the end of

2015 and 2016. In turn this would avoid section 997A being invoked by Revenue and

would allow substantially nullify the amended assessments under appeal. As we will

see later, the Respondent does not accept that the issue of the

receipt/acknowledgement by the ROS system fairly states the correct position.