A retired publican and farmer who failed to file a six-figure VAT return after he sold four apartments in Co Meath has been sentenced to 10 months in prison.
The total loss to the State of the VAT bill, combined with interest, amounts to €194,000, Dublin Circuit Criminal Court heard.
Patrick Murphy (69) owed the Revenue Commissioners €107,048 in VAT for the period of May to June 2007 after the sale of four apartments in Penny Lane, Cornmarket, in Navan, for a total of €871,532 in the same year.
However, instead of paying the VAT bill, he used the money to invest in another property in Navan for €375,000.
Judge Martin Nolan said Murphy had been a very hard-working man and a good family man who had hitherto led a blameless life, and that he was sorry to have to do this to him.
But he said tax fraud was serious and that it was “morally reprehensible” not to pay VAT of this large amount.
“Tax keeps a civilised country going. If people don’t pay their VAT and tax, the services we all need will eventually fail or break down,” said the judge.
Judge Nolan said an 18-month sentence was appropriate but taking into account Murphy’s age, medical conditions and other mitigating factors; he imposed a 10-month sentence instead.
Murphy, of Westbury Park, Lucan, pleaded guilty to failing to remit VAT returns to the amount of €107,048 to the Collector General for the period of May to June 2007.
John Clancy, an inspector of taxes at the Office of the Revenue Commissioners told prosecuting counsel Lisa Dempsey, an investigation into Murphy's financial situation came about following a query into capital gains tax from the sale of the apartments.
He said in March 2011 a number of interviews took place between the Revenue Commissioners and Murphy and it transpired a further investigation was warranted in relation to the non-filing of VAT returns.
Murphy had filed a zero VAT 3 return for May/June 2007 and he accepted this was incorrect and that it should have contained a figure of €107,048.
Murphy, who is now retired and a pensioner on a State pension, has two previous convictions for the non-filing of income tax from November 2005 and November 2009, both of which returns were subsequently filed.
Defence counsel Giollaiosa O Lideadha SC claimed the non-filing of the VAT returns was "not preplanned."
"Initially he wasn't aware a zero VAT return was put in by his agent. The agent claimed he didn't have sufficient information of the liability due but the defendant fully accepts he was criminally liable as he knew soon after. He put his head in the sand and hadn't told his family of the difficulties," said Mr O Lideadha.
He said an offer of €150,000 was put forward to settle the debts which were procured as a result of his daughter’s offer to sell her home. But this offer was rejected by the Collector General’s office.
He said Murphy, who left school at the age of 12 following an accident, set up his own business as a contract haulier and after he inherited his father’s house, he purchased a number of pubs, a farm and invested in the property market.
“Tragically the downturn in the economy created all sorts of knock-on effects. This is not an excuse as he knows he did wrong,” said Mr O Lideadha.
He said Murphy is “embarrassed and ashamed” for putting his wife and family through this situation.