Revenue raises serious concerns over €150,000 cash payments at charity

An investigation by Revenue has raised "serious concerns" over €150,000 that was paid out in cash by an animal welfare charity over two years, without any receipts or records.

An audit by Revenue officials has found Co Kerry-based charity, Animal Heaven Animal Rescue (AHAR) now owe over €130,000 in tax for the years 2015 and 2016 as a result.

The audit, completed last month, said there “was a significant lack of record keeping, financial control and governance” at the charity.

The report, seen by The Irish Times, said there was also “inconsistencies between figures reflected in the charity accounts year on year, for which there has been no supporting explanation provided.”

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“Significant cash payments were identified in the course of the revenue audit for which there was no supporting documentation or records available for verification,” the report said. This represented “very significant non-compliance with the charity’s tax obligations,” it said.

The auditor proposed to “classify these cash payments as remuneration and PAYE/PRSI/USC applied,” to now be charged as unpaid tax to the charity.

On foot of the report, trustees of AHAR have unanimously voted to wind the organisation down, and transfer its assets, staff, and land to Athlone Westmidlands Society for the Prevention of Cruelty to Animals.

The correct tax was not paid on cash payments of €74,135 in 2015, and €74,936 the following year. When PAYE, PRSI and USC were applied, and financial penalties, the charity owed Revenue over €130,000.

The charity, run by Suzanne Gibbons, has been at the centre of controversy previously over poor governance practices. Chief executive of the Irish Mortgage Holders Organisation David Hall, and three others, were appointed as trustees to AHAR late last year, at the request of the Charities Regulator.

In a report submitted to the regulator in recent days, Mr Hall said the findings of Revenue’s recent audit “will not allow the charity to continue to operate.”

Tax defaulters list

The charity primarily rehomes horses and dogs, and is based on a farm in Co Kerry. There are 280 animals housed on the farm currently, which will now come under the care of Athlone Westmidlands SPCA.

There was evidence “the same bad practices,” had continued into 2017 and up to the appointment of new trustees late last year, Mr Hall’s report said.

“I do not believe it possible or appropriate to try and retain public support and to fundraise for a €130,000 tax bill,” his report, also seen by The Irish Times, stated. AHAR would be listed on the tax defaulters list, which would “lead to irreparable reputational damage,” his report said.

“The charity has been neglected by former trustees for years and has never had proper and effective governance procedures,” Mr Hall wrote.

However despite the poor governance, he had witnessed no animal welfare concerns at the charity, he said.

The audit began in June 2017, but faced “significant delays and difficulties” in obtaining records and documentation from the charity, the Revenue report said. The State authority accepted explanations for the €150,000 cash payments at face value, despite lack of corroborating records.

The €130,000 tax bill now owed by the animal welfare charity was a “conservative” calculation, the Revenue auditor said.

Mr Hall’s report said indications from a further Revenue review of the charity’s 2017 accounts had uncovered a “provisional estimate” of “under-declared tax of €30,000,” not including further penalties.

When Revenue announced its audit, part of the charity’s insurance cover had been withdrawn, but this “had not been declared or managed by the trustees at the time,” Mr Hall’s report said.

In a statement the charity’s founder Ms Gibbons said the “Revenue issue arises from non payment of PAYE and nothing else,” and she had no other comment.

Speaking to The Irish Times, Mr Hall said the closure of the charity was “inevitable” due to the poor practices around book keeping and financial records.