Tax Appeals Commission determination 137TACD2022 regarding Income Tax, 2022

Administrative Decision Number137TACD2022
Date03 August 2022
Subject MatterIncome Tax
1. This matter comes before the Tax Appeals Commission (hereinafter “the Commission”) as
an appeal against assessments to Income Tax raised by the Revenue Commissioners
(“the Respondent”) on 5th November 2019 and 6th November 2019.
2. The assessments covers the tax years 2014 and 2015 and the Income Tax due on the
assessments amount to €7,453 for 2014 and €45,988 for 2015. The Appellant is appealing
those assessments in accordance with section 933 (1) (a) Taxes Consolidation Act 1997
(“TCA 1997”).
Preliminary issue
3. The appeal proceeded by way of remote hearing held on 5th July 2022. The Appellant was
represented at the hearing by his tax advisors and the Respondent was represented by
Counsel. At the commencement of the hearing the Commissioner was informed that the
Appellant (not in attendance) was advised by his medical consultant that he was not in a
position to attend the appeal hearing but had indicated that he was agreeable for the
appeal to proceed. Upon questioning by the Commissioner, the Appellant’s agent informed
the Commission that it was unlikely that the Appellant would ever be in a position to give
evidence to the Commission or assist the appeal as his medical condition caused severe
memory lapses. Having been informed that the Appellant’s agent was under instruction
from a third party for the appeal to proceed, the Commissioner adjourned the hearing
momentarily for the Appellant’s advisor to get confirmation from the Appellant’s next of kin
that it was in order for the appeal to proceed. The Appellant’s next of kin confirmed this
4. The Commissioner then asked the Respondent if they had any concerns with the appeal
proceeding absent the Appellant but with the consent of his next of kin. The Respondent
stated that while section 949AA TCA 1997 ordinarily requires the appeal to be struck out
owing to non-attendance by the Appellant, in the circumstances they were satisfied that
the appeal should proceed and the hearing commenced accordingly.
5. The Appellant incorporated his business in and traded as a draper under
the name (“the company”). Both the Appellant and his wife
were the original directors and shareholders in the company. In 2012, the Appellant
transferred his shares to his daughter, resigned as a director of the company and
appointed his daughter in his place. Although, he had no shareholding or formal office
holding within the company post 2012, the Appellant continued to work in the company
full-time and retained full and exclusive control of the company from the ordering of stock
to recording the company’s sales of the business by hand. The Appellant was assisted in
the running of the operations by two part-time staff over whom he exercised control. The
Appellant’s daughter lived overseas and had no active part in the running of the company’s
business and while his wife retained her small shareholding and directorship with the
company, she had no input into the day-to-day running of the company’s business.
6. The Appellant previously informed the Commission (see below) that he was required to
continue working in the company’s business, as this was a condition required for him to
receive payments from his pension scheme. He further advised that he was not an
employee of the company since 2012 and did not receive any salary or other payments
for the provision of his services to the company.
7. The company was subject to an intervention by the Respondent in or around 2017 which
resulted in the issuance of notices of assessment for VAT for the tax years 2014 in the
sum of €12,062 and 2015 in the sum of €18,138.72. In addition, the Respondent issued
notices of assessment to the company for PAYE/PRSI/USC (“PREM”) in the sum of
€53,453 for the tax years 2014 and 2015.

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