Accountant charged with aiding and abetting incorrect VAT return

A Waterford accountant has been charged in the Circuit Court with aiding and abetting the filing of an incorrect VAT return to the Office of the Collector General of the Revenue Commissioners arising out of the purchase and sale of a factory in Ennis Co. Clare.

John O’Donoghue of Waterside, Waterford, has pleaded ‘not guilty’ to the charge of aiding and abetting Paclene Ltd to make an incorrect return in connection with £125,000 punts added value tax in or around May 12, 2001.

Barrister Neal Whelan, instructed by State Solicitor Frank Hutchinson, Waterford, for the DPP, told a jury that the charge arose out of a ‘three way deal’ involving the purchase and sale of a factory in Ennis. The company, Paclene Ltd, was owned by Austin Brady of Wicklow and he had an option to buy a factory on the Industrial Estate in Ennis from Irish Polythene Ltd (IPI). The option was exercised and the agreed price was £600,000 punts. VAT of twelve and a half per cent was due on commercial property and Paclene Ltd would have had to pay £75,000 punts VAT.

Paclene Ltd was a very ‘good and clever’ company and, on the same day, they sold the factory to another company, Galileo Ltd, for a substantial profit of £1m punts and there was nothing wrong with that. But they had to charge Galileo £200,000 punts VAT on the sale and the total amount they had to pay was £1.8m in all.

Tax man short money

Neither the purchase VAT out, or the sales VAT taken in, was paid to the Revenue Commissioners. The VAT should have been declared and the tax man was short by £125,000 punts. Paclene Ltd was prosecuted and pleaded guilty in another court. Mr. O’Donoghue was charged with the offence of knowingly aiding and abetting the filing of a false return. He was the person completing and filing the VAT return and the prosecution’s case was that he should have returned the difference between the sale and the purchase and enclosed a cheque for £125,000 punts to the Revenue.

Mr. Whelan, BL said that Mr. O’Donoghue was an accountant and he put ‘nil’ on the purchase, ‘nil’on the sale and ‘nil owed’ on the return. By so doing he knowingly aided and abetted Paclene Ltd to file an incorrect VAT return. He knew the purchase of the factory had been completed or he knew the sale to Galileo Ltd. had been completed or he knew both.

Mr. Alan Toal, BL., instructed by William Hackett and Co. Solrs., are for the defendant. The trial is expected to take four days and is due to end next week.

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