Tax Appeals Commission determination 137TACD2022 regarding Income Tax, 2022

• Administrative Decision Number: 137TACD2022
• Date: 03 August 2022
• Subject Matter: Income Tax
• Respondent: THE REVENUE COMMISSIONERS

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137TACD2022

Between

Appellant

and

THE REVENUE COMMISSIONERS

Respondent

Determination

Introduction

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

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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

position.

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.

Background

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.