About 3,000 customers of Irish Permanent's bank in the Isle of Man will today begin to receive letters warning them that the Revenue is about to investigate monies they deposited in the bank. Siobhán Creaton, Finance Correspondent, reports
The Revenue has told Irish Permanent that it will begin a formal investigation into its customers' accounts and into the bank itself on November 17th. Irish Permanent Isle of Man yesterday posted letters to customers who held accounts there since it opened in 1993.
In the letter, the bank's chief executive, Mr Philip Murray, informed customers about the imminent investigation and advised them of the substantial benefits available if they voluntarily disclosed their tax liability ahead of the investigation.
A spokesman for the bank said the investigation was to establish the identity of Irish residents who have or who held accounts at Irish Permanent Isle Of Man. "We are co-operating fully with the Revenue Commissioners," he said yesterday.
He would not disclose the amount of money it may have held for these customers but industry sources suggest it could be as much as €100 million. The accounts were opened by customers of Irish Permanent, the former building society that now trades as Permanent TSB.
This scrutiny follows the Revenue's investigation into Bank of Ireland's Trust Company in Jersey in June this year. Revenue chairman Mr Frank Daly yesterday told the Dáil Committee of Public Accounts that its investigations into offshore funds had so far netted €111 million for the Exchequer.
Some €100 million came from Bank of Ireland customers while a further €11 million was paid by customers of other banks. The Revenue has indicated that further monies remain to be collected from Bank of Ireland's customers and it has signalled that it intends to examine funds held by all Irish financial institutions in the Channel Islands.
Mr Daly told the committee that it was not unrealistic to expect that special investigations will eventually yield over € 1 billion in unpaid tax. These type of investigations have so far recovered € 892 million.
The Revenue has already sought information on customers with monies held at Anglo Irish Bank in the Isle of Man.
Yesterday the bank's chief operations officer, Mr Tiarnan O'Mahony, told The Irish Times it had not written to its customers about the Revenue's inquiries and didn't plan to do so. The bank holds more than €1 billion in funds in the Isle of Man of which about €30 million is owned by Irish residents.
Bank of Ireland customers who held trusts in Jersey were mainly very wealthy individuals. Of the 254 who have made settlements with the Revenue, one individual paid €7.3 million and 27 paid between €1 million and €2 million.
These payments included interest, taxes and penalties owed on funds held in these trusts. Bank of Ireland wrote to its customers in May warning them that the Revenue would begin an investigation in June and advised them to come forward voluntarily to settle any potential tax liabilities.
The amount of money that could be recovered from Irish Permanent and Anglo Irish Bank customers is likely to yield much less than that from Bank of Ireland customers.
In its letter Irish Permanent told customers that the Revenue Commissioners had obtained information related to money transfers and cheques they lodged through Bank of Ireland to its Isle of Man business on foot of a High Court order. Bank of Ireland acted as the agent to clear cheques for Irish Permanent customers at that time.
Irish Permanent shut its Isle of Man business to Irish residents in July and wrote to all of these customers telling them to close their accounts. It continues to take funds from residents of other countries and from Irish people living abroad.
The Revenue has collected €47 million from the National Irish Bank/Clerical Medical International scheme and €26 million from Ansbacher account holders. A further €684 million has been collected from the DIRT inquiry into bogus non-resident accounts. Investigations arising from the tribunals have netted € 24million.
- Mark Hennessy adds: The Revenue investigation into operations similar to the one run by Bank of Ireland's Jersey subsidiary is set to reap up to €600 million in taxes, interest and penalties, informed sources indicated last night.