From the early 1990s publican A, through limited liability companies, has been involved with pubs owned by publican B. In each case, a pattern was followed which "outsmarted and rendered useless the normal Revenue procedures in this area", according to the report by the Comptroller and Auditor General (C&AG), Mr John Purcell.
Publican A would have a company which would be partly compliant for VAT in the first year and would then organise an instalment arrangement for a small monthly amount for the following year. The payments would not be made and after three years the company would be dissolved. The licence would be transferred to publican B.
He would obtain a new tax clearance certificate and the renewal of the licence. A few years later the new company set up to run the pub would be dissolved, and the licence transferred to another company with publican A as a director. The pattern would then be repeated again.
The C&AG discovered a write-off in this way of €146,000. He also discovered a further €100,000 written off to publican A.
Publican A's companies had not made any Corporation Tax returns up to the time of the C&AG's study. Publican B had declared only one of his 10 directorships to the Revenue. One of his companies acquired eight properties, mainly pubs and hotels, in the period 1987 to 1997, while not registered for tax. At the time of licence renewal application, three of the pubs declared annual turnovers of between €1 million and €2.5 million.
Twenty two companies which operated pubs owned by publican B were dissolved without a formal wind-up or statement of affairs. No company returns were made to the Companies Registration Office during the period of incorporation. The publicans were not named but they will now be investigated by the Revenue and its new Dedicated Pursuit Unit in the Collector General's office.