Ireland: Revenue 'could claw back VAT'
11 June 2012
Posted by: SAIT Technical
THE Revenue Commissioners may be able to claw back at least some of the €1.4m Mick Wallace underpaid on his VAT bill.
Mr Wallace settled with the taxman but says he cannot pay the bill. Accountants, however, say the Revenue may be able to claim back the funds he paid to the bank instead of Revenue in the first place, using a proviso in company law known as "fraudulent preference".
M&J Wallace is currently in receivership. If the Revenue Commissioners ultimately appoint a liquidator to M&J Wallace, there is a provision in the Companies Act of 1990 to use fraudulent preference to reclaim payments that have already been made to one creditor by the company ahead of others which are owed money.
While there is no suggestion at this time that Mr Wallace's decision to pay the banks rather than the Revenue was a fraudulent preference, accountancy experts said it was something that could be explored if a liquidator did end up being appointed to M&J Wallace.
In a liquidation, Revenue is usually repaid what it is owed ahead of other creditors.
The Revenue Commissioners would not comment on a specific case.