Settlements lift DIRT clawback to £163.8m

The tally of payments made by financial institutions arising out of the DIRT tax affair is now running at £163.8 million (€207.98 million) following the latest settlements announced yesterday.

The Revenue Commissioners are due to submit a report on their DIRT tax audit to the Dail Committee of Public Accounts (PAC) on Wednesday and several other institutions may announce settlements before that. The audit concerns the period 1986-99.

Details of settlements were announced yesterday by the National Irish Bank group, TSB Bank and Bank of Scotland Ireland (formerly Equity Bank).

NIB will settle its DIRT liability with a payment of £5.25 million, comprising £2.29 million in DIRT and £2.96 million in interest and penalties.

The settlement exceeds the group's own estimated liability quoted in the Comptroller & Auditor General's (C&AG) DIRT report for the PAC by a factor of 16, by far the greatest underestimate of the liability of any institution which has settled to date. The group had estimated its liability as £337,915.

TSB Bank will settle its DIRT liability with a payment of £2.75 million, made up of DIRT of £1.2 million and interest and penalties of £1.55 million. Bank of Scotland Ireland made a settlement of £86,000.

RTE reported yesterday that Irish Nationwide will make a settlement of £4.4 million but a spokeswoman for the society would not confirm this.

BNP Paribas announced that following a lookback audit of its Dublin branch, the Revenue had assessed the bank as having no DIRT liability for the period examined. According to the C&AG's report, the bank had 3.2 per cent of the non-resident market in November 1998.

Mr Don Price, chief executive of Northern and National Irish Bank, said the group was pleased its negotiations with the Revenue had reached a "satisfactory conclusion".

"The bank has introduced widespread changes to improve its procedures, with much of the administrative work carried out centrally. There has also been comprehensive training for staff on compliance issues.

"We are absolutely determined to put past shortcomings behind us and to establish National Irish as exemplary both in its internal controls and its commitment to being a good corporate citizen."

Comparisons between settlements announced and estimates quoted in the C&AG's report show that the Bank of Ireland under-estimated its liability by a factor of 10.8; Ulster Bank by a factor of 4.6; and AIB by a factor of 1.6. ACCBank gave a wide range for its estimate, which means the settlement was either equal to the estimate or 11.9 times its size.

The Labour Party spokesman on Enterprise, Trade and Employment, Mr Pat Rabbitte, who is a member of the PAC, said a "comprehensive report" from the Revenue chairman, Mr Dermot Quigley, would be heard when the committee's DIRT hearings resume on Wednesday.

"At the present time the Exchequer does not need this unexpected bonus and the Minister for Finance should ensure that these receipts are ringfenced for suitable purposes to assist some of the people who endured hardship as a result of the tax evasion of the '80s and '90s.