Drumm paid more than €6m income tax while on Anglo board

THE FORMER chief executive of Anglo Irish Bank David Drumm paid in excess of €6 million in income tax during his period on the bank’s board.

Income tax returns for the period show that Mr Drumm paid income tax of €6.31 million on gross income of €12.47 million.

The effective tax rates on his income during the period ranged from 36.52 per cent in 2004, the year he was appointed to the board, to 54.1 per cent in 2008, his last year on the board.

Pay and file income tax returns for Mr Drumm show he declared an income of €276,749 from Anglo in 2004, on which he paid PAYE of €103,245.

The following year he declared income of €833,953 from the bank on which he paid PAYE of €336,612. In 2006 he declared income from Anglo of €852,741 and paid PAYE of €344,382.

In 2007 he declared income of €7.53 million and paid PAYE of €3 million. In 2008 Mr Drumm earned 2.83 million and paid €1.5 million. He also paid tax on share options he was granted in Anglo. Mr Drumm was made chief executive of Anglo in January 2005 and resigned in December 2008.

Yesterday The Irish Timesincorrectly reported that Mr Drumm had paid only €10,000 in tax during the period. The report was based on an incorrect interpretation of a document filed by the Revenue Commissioners in a court in Boston.

The former chief executive has filed for bankruptcy in Boston and the Revenue recently notified the court of a claim for €837 in income tax against him, claiming the amount arises from the 2008 year. The Revenue submission contained a list of Mr Drumm’s income tax liabilities and “collections” each year for the past number of years. However, tax advisers said the liabilities and amounts collected quoted in the document were post the payment of PAYE and other taxes.

Mr Drumm could not be contacted yesterday. However, sources with knowledge of his personal affairs said he had not invested in property-based tax schemes or any form of aggressive tax planning.

The banker’s former employers are expected to challenge his bid to have himself discharged in Boston from an €8.5 million debt he has to the bank. The bank has indicated it may make a further unspecified claim against Mr Drumm arising from what it claims were improper acts by him during his time at the bank.

To succeed in preventing Mr Drumm’s debt to Anglo being written off by the Boston court the bank will have to show to the court that he has acted in bad faith.

Anglo wants the court to direct Mr Drumm to hand over a recent report by special investigator John Purcell for the Chartered Accountants Regulatory Board. Mr Drumm, an accountant, has said the report was given to him in confidence, a claim the bank disputes.

The report concludes there is a prima facie case that Mr Drumm is liable to disciplinary action in relation to a number of his actions while at the bank’s helm.