Court clears way for prosecution of accountant on tax offences

A High Court judge has cleared the way for the prosecution of an accountant for alleged revenue offences. A stay on that prosecution applies pending any appeal of the court’s decision.

Brian Murphy was charged in February 2014 with eleven offences under the 1997 Taxes Consolidation Act following an investigation by the Revenue Commissioners in relation to a VAT return made by SecureMed Ltd, a company of which Mr Murphy was, for a short time, a director and tax agent.

Mr Justice Seamus Noonan noted Mr Murphy, Abbey View, Ballea Road, Carrigaline, Co Cork had also been a shareholder in the company, also known as ProChoice Recruitment although the shares may have been held in trust for another party.

In judicial review proceedings against the Director of Public Prosecutions and the Revenue Commissioners, Mr Murphy, an accountant who at the material time was an audit partner in accountancy firm Deloitte, sought orders including one prohibiting the prosecution.

He claimed the prosecution, which arose from invoices submitted to Revenue as part of a claim by SecrurMed Ltd in 2011 for a VAT refund of €105,000, was brought unlawfully and should be restrained.

Dismissing the proceedings, Mr Justice Noonan said Mr Murphy had not demonstrated he had suffered prejudice or injustice of any kind”.

Through his lawyers, Mr Murphy had claimed he was entitled to an order halting his prosecution on grounds including that Revenue, when giving SecureMed notice in 2012 it was to be audited, did not also serve him with a notification all his tax affairs were to be audited in 2012.

He also argued he had a legitimate expectation, under provisions of Revenue’s Code of Practice, he would have been notified about the audit.

The failure to serve him with such notification prevented him making a prompted qualifying disclosure to Revenue, he argued.

Had he been afforded the opportunity, and availed of it, Revenue would not have been entitled to pursue the prosecution being brought against him by the DPP, he argued.

He also submitted, once he was formally served with a formal notice of a formal Revenue Investigation in 2013, he was no longer permitted to make a qualifying disclosure.

In the circumstances, the current prosecution had been brought unlawfully, he claimed.

In opposing the proceedings, counsel for Revenue and the DPP argued the application was “artificial” and “entirely devoid of merit.” Mr Murphy, it was argued, must be taken to be well aware of his right to make an unprompted qualifying disclosure at any time up to the start of the formal Revenue investigation in 2013.

Mr Murphy did not suffer any prejudice or unfairness of any kind, they submitted.

In his decision, Mr Justice Noonan said any suggestion Mr Murphy was “in some way deprived of an opportunity to benefit by the alleged failure to serve notice of an audit does not stand up to scrutiny”.

He also could not see how “the doctrine of legitimate expectation” could have any application in this case, the judge said.