A farmer has won a €72,728 tax battle with the Revenue Commissioners concerning a dispute over a €140,656 Department of Agriculture Single Payment Scheme (SPS) payment.
Revenue issued the farmer with the €72,728 tax demand after finding that it arose as a liability on the €140,656 payment that the farmer did not include in his own annual income tax returns to Revenue.
The farmer contended that the Revenue Commissioners were out of time to issue the amended €72,728 assessment under tax law which provides for a four-year time limit.
The farmer appealed the decision to the Tax Appeals Commission (TAC) and now the TAC has found in his favour.
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Appeal commissioner Claire Millrine has found that the Revenue Commissioners were incorrect to issue the demand for the €72,728 as it was outside of the time limits contained in the Tax Acts and has directed that the €72,728 assessment be reduced to nil.
Ms Millrine said she was satisfied that the appellant’s income tax return for 2011 “was complete, accurate and truthful having regard to the facts of this particular appeal”.
Ms Millrine also found that as Revenue issued the demand out of time, the substantive issue, whether the SPS payment from the Department of Agriculture was taxable as income in the hands of the farmer or was instead taxable as income received by his farm firm, does not arise.
The TAC ruling reveals that the Tax Appeals Commission has been requested to state and sign a case for the opinion of the High Court in respect of the determination.
The farmer has a number of land interests and on May 30th, 2011, incorporated his farming business into a company along with transfers of assets and the herd number.
In October 2011, the €140,656 SPS payment from the Department of Agriculture was paid to the farmer’s bank account and then subsequently transferred to the bank account of a new company.
The farmer did not include the SPS payment in his income tax return for 2011 but the SPS payment was included in corporation tax return for the year ended May 31st, 2012..
