Dublin property owner, Paul Howard, who neglected to report his rental earnings, has been handed a hefty penalty of more than €1 million – a full 100% charge – by the Revenue. Mr Howard, a resident of Larkfield Avenue, Harold’s Cross in Dublin, was determined to be purposely defaulting on his tax obligations. Furthermore, once the Revenue launched their probe into his financial matters, he was deemed not eligible for any decrease in penalty due to non-cooperation.
The seemingly harsh penalty was sanctioned on Monday by Justice Miriam O’Regan, following a request from Shelley Horan, representing the Revenue. There was no opposition to this from Mr. Howard himself. As per usual practice, tax offenders are typically served with bills, which include the unpaid tax, interest on it and an added penalty amount deriving from the extent of the non-compliance or their level of cooperation with the Revenue.
The property proprietor Paul Howard, along with his life partner, Una McClean, also of Larkfield Avenue anchored a number of real estate properties throughout north inner city Dublin and was engaged in property projects in Turkey. Together, they also owned a launderette, Clean City, on Talbot Street.
A 2009 email launched the investigation of Mr Howard’s finances. The email was sent to the Revenue’s ‘Good Citizen’ evasion reporting system and it revealed that the couple preferred to store large sums of money at home rather than depositing it into bank accounts. This prompted the Revenue to issue notices seeking financial information from institutions linked with the pair’s bank accounts. However, their subsequent appeal to the Tax Appeals Commission against the tax assessments was rejected.
In August 2021, the Tax Appeals Commission ruled against Mr. Howard, revealing that his estimated gross income for the 12 years until 2014 totalled €2.38 million, while he had only declared €409,725. The Commission indicated that there was no proof that any income from the rental properties was deposited into any bank account. Mr Howard, at the hearing, confirmed the allegations in the email to the Good Citizen system.
According to an email communication, tenants have two alternatives when it comes to paying their rent. The first method involves leaving the combined rent in their apartments inside an envelope, typically in the kitchen area. The building’s keeper, Mr Howard, then collects these personally at the start of each month, mostly in the absence of the residents.
The alternate method is chosen by some tenants who prefer personally delivering their rent to Mr Howard’s business venture, Clean City, located on Talbot Street on the first day of every month. They directly submit it to the employee at the counter.
However, Mr Howard and Ms McClean, his partner are facing a considerable tax burden. They have tax judgments against them respectively of €1.2 million and over €300,000. The total also includes interest of around €1.1 million for Mr Howard and almost €300,000 for Ms McClean.
An allegation by the pair has postponed the collection of tax and interest. They argue that the current system whereby the Collector General utilises the legal services of Ivor Fitzpatrick & Co for tax collection, as a ‘champertous agreement’. They maintain it’s illegal since a third party is aiding in a lawsuit in exchange for a share of the proceeds. Despite losing their case initially in the High Court, they have brought their appeal to the Court of Appeal where a verdict remains to be announced.
The couple have accumulated a substantial property portfolio over time. This includes properties in Mountjoy Square, premises on Talbot Street and a residence at Larkfield Park, Harold’s Cross, Dublin 6. The couple has sold property to the value of more than €1.5 million from 2018 to 2021. Ms Horan reported to the commission that the couple’s appeal against the tax assessments seemed to be a ‘ploy’, while they were continually offloading their properties.