Irish Life & Permanent has paid £7.5 million (€9.52 million) to the Revenue Commissioners in settlement of its DIRT liabilities between 1986 and 1999. It is the fourth financial institution to make such a payment, bringing the total amount of taxes recouped to £60.5 million. The Revenue is continuing audits at 33 other institutions and is due to finalise all outstanding DIRT liabilities by November.
Irish Life & Permanent's payment relates to an underlying DIRT liability of £3.7 million due to the Revenue on bogus non-resident accounts held at the bank during the 13-year period. In addition, the Revenue applied interest and penalties of £3.8 million on that sum. The hefty penalty is in line with those applied to the three other institutions, ACCBank, Ulster Bank and Bank of Ireland.
The bulk of its liability was due on £5 million held in bogus non-resident accounts at the Irish Permanent branch in Killarney in 1991. These accounts were discovered during a routine branch audit. It established that these accounts had been opened by the branch manager under false names at an address of a relative with the same name who lived in the US. On foot of those findings, Irish Permanent reclassified the funds as resident deposits and DIRT tax was applied from 1991. It decided, however, not to pay any arrears to the Revenue. The manager faced disciplinary proceedings which culminated in the loss of salary increments.
At the DIRT Inquiry last year, Irish Life & Permanent chairman, Mr Roy Douglas said that because the bank manager in Killarney had been "complicit" in setting up these accounts and had acted against the best interest of the Irish Permanent, it believed the society had no responsibility to pay arrears. It was only when reports concerning bogus accounts at AIB emerged two years ago that it took legal advice on the situation. The advice was that it should settle its arrears with the Revenue.
The company told the inquiry that its DIRT underpayment regarding the Killarney accounts was around £250,000. It subsequently made a £700,000 payment to the Revenue Commissioners on account, before the current audits began.
Irish Life & Permanent group chief executive, Mr David Went, said yesterday the company regretted this situation had occurred. "Lessons have been learned and we have taken steps to ensure that nothing of this nature happens again in our business."
The settlement excludes any liabilities it may have to the controversial Ansbacher deposits, which are the subject of ongoing investigations and were held at its Guinness & Mahon subsidiary purchased by Irish Life & Permanent in 1994.
Between 1970 and 1989, £38 million was deposited by Ansbacher Bank's Cayman Islands' operation with Guinness & Mahon on behalf of Irish-based individuals. The deposits were not subject to DIRT and many of the depositors were also hiding funds from income tax.
