Mick Wallace underpayment of VAT

[mandelbrot]

Well the company was audited by Revenue, so you'd imagine they satisfied themselves in relation to the other taxheads (or maybe not!).

 

[Purple]

How do we know the company paid its PAYE/PRSI in full? RCT too? CIF pension contribs?

For all we know they could have been underdeclared as well. He has prior for this sort of thing.

Wasn't there an issue with him not paying into his employees pension fund as is required by law?

 

[mandelbrot]

Wasn't there an issue with him not paying into his employees pension fund as is required by law?

Yep, I presume that's what DB74 means by him having prior form: http://www.rte.ie/news/2011/1205/wallacem.html

It happened around the same time as the messing with the VAT.

In my experience from dealing with builders, practically none of them were ever up to date with the CIF pension contributions, even before the crash arrived. But Wallace got headlines because of his profile.

What I see when I look at the whole sorry mess is a guy who was faced with imminent closure of his business and the loss of 50 jobs, and decided to try and defer the problem in the hope that things would recover. They didn't, he gambled and lost, and there should be a penalty for that. He should resign his Dail seat anyway, whatever about any punishments that may be imposed on him.

But to equate his behaviour with that of a guy who over a protracted period of time deliberately lined his own pockets at the expense of the exchequer (not to keep a struggling business afloat, but purely out of greed) is simply hysterical. They are miles apart.

Having said that, if someone can tell me definitively that the VAT wasn't accrued as a creditor on the company's accounts, then I'd have a very different opinion.

 

[Sunny]

Having said that, if someone can tell me definitively that the VAT wasn't accrued as a creditor on the company's accounts, then I'd have a very different opinion.

Without seeing the accounts, I would like to meet the accountant and auditor who signed off on accounts with VAT accruals on the Balance Sheet for more than two years without any payment or an underpayment being made and no questions asked. I would imagine this was done off the books.

 

[thedaras]

Just some background to Mick Wallace:

I'm no martyr. I am running a business and I make sure it pays its way. I never lost money on a job in my life but I try to run it in an honest fashion."

He now owns a small vineyard in Italy and hopes to soon sell wine from it in Dublin.

He also gives temporary accommodation to a Communist Party of Ireland bookshop

"I wouldn't be as well-off if I worked in a socialist system but I do believe that corporation tax should be higher,"

And this ;

Some years ago, one of Dublin's biggest builders was given a stark example of this. Wallace did £170,000 worth of work for him but was only paid £150,000, a stunt the powerful builder was well-known for. After six months of legal action, Wallace's solicitor told him it would take two years to get to court and he'd be lucky to get £2,000.

"So I knew of a guy made a living out of a gun," he says. "I made contact with him and said ‘listen, there's a guy owes me £20,000 - will you get it for me?' He said he would give me £16,000 and keep £4,000."

"There was a guy working for the builder and I deliberately went for a pint with him," continues Wallace. "‘Did you hear I'm getting the money out of your boss?' I said to him. ‘I hired a hitman and he's going to get it. Don't tell anyone now.' Next day I got a phone call from the managing director. ‘Mr Wallace,' he says, ‘I believe there is a bit of a financial dispute on that job. Can we meet and talk about it?' I met them and they offered me £15,000. I said I'd take £16,000. Of course, I never would have dreamt of actually hiring the hitman. I only used him as leverage but it worked."

"I had my cap in hand begging the banks for money," he says. "It took me 18 months to get a bank to finance this and five refused me. I expected the AIB to finance it because I had a great relationship with them in Wexford for 15 years. I was brought into AIB headquarters to meet the top boys."

Back in Ormond Quay, Wallace caresses a huge boardroom table in a plush office lined with rows of fine Italian wine. Despite the plush décor and the sundrenched view of the Millennium Bridge, nothing quite catches the eye like Wallace's bright pink Palermo football jersey.

And here is an article about the pension contributions mentioned by a poster:

Also yesterday, Mr Wallace's company M&J Wallace, which is in receivership, was prosecuted at Dublin's District Court for allegedly taking workers' pension contributions from their wages but not paying them to the CWPS.

"I'm wrong to be paying late, but it's because of a dispute over how much is due. The delay is because of a discrepancy over the amount of money involved," he explained.

 

[ninsaga]

...and here's the real irony.... he defrauded the state, but the state is paying his TD salary and expenses!....

Go figure!

 

[DerKaiser]

Having said that, if someone can tell me definitively that the VAT wasn't accrued as a creditor on the company's accounts, then I'd have a very different opinion.

"He admits to having knowingly made a false VAT declaration to Revenue"

 

[thedaras]

Yes,but he did so in good faith!!

As an aside is there some law about Company Directors and reckless trading?

 

[DerKaiser]

“I always found it curious that the likes of Joan Collins, Clare Daly, Joe Higgins and Richard Boyd Barrett thought nothing of cosying up to a property developer in the Dail, but the fact that Deputy Wallace is now a self-confessed tax cheat must give them real cause to shift uncomfortably in their seats,”
[broken link removed]

Will be interesting to see if the above mentioned and indeed Shane Ross condemn one of their own cronies

 

[Sunny]

When you read Mr. Nolans letter in todays Irish times, you begin to see why things like this will always happen.

[broken link removed]

 

[mandelbrot]

Just some background to Mick Wallace:
http://www.businessandfinance.ie/index.jsp?p=413&n=427&a=2095

I can't believe I appear to be defending him, as I don't approve of his shenanigans at all, but seeing as I live in the real world, in an Ireland which is full of people who'll chance their arm...:

I can't help but wonder about the naivety of some of the posters on here; it's either naivety or ye are all virtuous beyond all reproach. AAM posters clearly don't make for a representative sample of the general population!

"I'm no martyr. I am running a business and I make sure it pays its way. I never lost money on a job in my life but I try to run it in an honest fashion."

He also gives temporary accommodation to a Communist Party of Ireland bookshop

OK, good to know, I don't really see what either of those bring to light?

"He now owns a small vineyard in Italy and hopes to soon sell wine from it in Dublin."

So, that would be what's known in business as diversification then. Also, it says Wallace himself owns it, so unless we're alleging other impropriety on his part, he financed it from his taxed income, at a time when the business was doing well.

"I wouldn't be as well-off if I worked in a socialist system but I do believe that corporation tax should be higher,"

OK, that's how he feels about that.

Some years ago, one of Dublin's biggest builders was given a stark example of this. Wallace did £170,000 worth of work for him but was only paid £150,000, a stunt the powerful builder was well-known for. After six months of legal action, Wallace's solicitor told him it would take two years to get to court and he'd be lucky to get £2,000.

"So I knew of a guy made a living out of a gun," he says. "I made contact with him and said ‘listen, there's a guy owes me £20,000 - will you get it for me?' He said he would give me £16,000 and keep £4,000."

"There was a guy working for the builder and I deliberately went for a pint with him," continues Wallace. "‘Did you hear I'm getting the money out of your boss?' I said to him. ‘I hired a hitman and he's going to get it. Don't tell anyone now.' Next day I got a phone call from the managing director. ‘Mr Wallace,' he says, ‘I believe there is a bit of a financial dispute on that job. Can we meet and talk about it?' I met them and they offered me £15,000. I said I'd take £16,000. Of course, I never would have dreamt of actually hiring the hitman. I only used him as leverage but it worked."

Fair play to him for not lying down and being bullied. I wonder if any small suppliers of Dunnes Stores have ever considered taking out a hit on Margaret... I think the key point is that he didn't actually hire a hitman, but let them think he had, another area where there's a huge distinction.

"I had my cap in hand begging the banks for money," he says. "It took me 18 months to get a bank to finance this and five refused me. I expected the AIB to finance it because I had a great relationship with them in Wexford for 15 years. I was brought into AIB headquarters to meet the top boys."

Hmmm big whoop-dee-do: "Bank executives meet businessman customer" - shocking headline!

Back in Ormond Quay, Wallace caresses a huge boardroom table in a plush office lined with rows of fine Italian wine. Despite the plush décor and the sundrenched view of the Millennium Bridge, nothing quite catches the eye like Wallace's bright pink Palermo football jersey.

Yep, wasn't he doing well, like so many other businesses in a country that was booming... unless you're saying he bought all this stuff while things were going down the swanny then you can hardly say you find it surprising that he had a plush office, when his company was making millions in profits?

And I can't bothered quoting my own link from earlier - he says he was in dispute over the amount owed. Hands up anyone who has ever dug their heels in with a supplier or other party with whom they were in dispute over payment...

 

[mandelbrot]

When you read Mr. Nolans letter in todays Irish times, you begin to see why things like this will always happen.

[broken link removed]

So, what, you're comparing Mick to Charlie Haughey?

Or just commenting on the crazy attitude of Mr Nolan?

 

[Sunny]

I don't think you can accuse other people of being naive when you are saying that he probably meant to pay the VAT eventually and accrued the liability on the company's balance sheet. As I said earlier, what accountant or auditor allowed a VAT liability to be put on the balance sheet for a couple years, see no payment or a large underpayment and then signs off on the accounts? Do you really believe he avoided VAT but kept his accounts true and fair?

 

[Sunny]

So, what, you're comparing Mick to Charlie Haughey?

Or just commenting on the crazy attitude of Mr Nolan?

Commenting on peoples attitudes to politicians who are caught doing something wrong. Never a shortage of people who will defend them no matter what. People are already saying 'poor Mick was nothing but a hard working businessman who was a victim of the evil banks'.

 

[mandelbrot]

I don't think you can accuse other people of being naive when you are saying that he probably meant to pay the VAT eventually and accrued the liability on the company's balance sheet. As I said earlier, what accountant or auditor allowed a VAT liability to be put on the balance sheet for a couple years, see no payment or a large underpayment and then signs off on the accounts? Do you really believe he avoided VAT but kept his accounts true and fair?

And you've just proven my point, because I see audited accounts across my desk everyday, and I've seen cases identical to what I've described. So no, I'm not naive, I stand over what I said.

 

[Sunny]

And you've just proven my point, because I see audited accounts across my desk everyday, and I've seen cases identical to what I've described. So no, I'm not naive, I stand over what I said.

So you have seen audited accounts everyday showing a company is deliberately not paying or under paying VAT because they cant afford it for a prolonged period of time with no note to the financial statements or comment from the auditor? And these companies are simply sticking an accrual on the balance sheet?

Must make audits very easy for Revenue. Just ask for the balance sheet of every company and the avoidance of tax is there in black and white.

 

[oldnick]

Owning a small business for 3oyrs+ my wife and I would go into paroxyms of anxiety if we were tardy in submitting accounts, if we thought we'd erred in any Corp tax, PAYE, Vat,breached any Health and Safety rule, Travel Trade rules and regulations and a myriad other public laws.

We lost money in the last couple of years -traded badly and eventually closed the business with not a penny more than we put into it.
Our average earnings over 30 years were, each of us, little more than the average industrial income- half that amount in the last year.

When we closed the business we made sure that employees, creditors, Revenue/VAT were fully paid inc. redundancy.

Did we behave like this because we're idiots, cowards or because we're not Irish ?

 

[thedaras]

I can't believe I appear to be defending him, as I don't approve of his shenanigans at all, but seeing as I live in the real world, in an Ireland which is full of people who'll chance their arm...:

You are coming across as defending him,which may not be intentional.
Just because we have an Ireland which is full of people who will chance their arms,does not make a discussion of the Mick Wallace issue irrelevant.

I can't help but wonder about the naivety of some of the posters on here; it's either naivety or ye are all virtuous beyond all reproach. AAM posters clearly don't make for a representative sample of the general population!

Id say you are very wrong there, as I have been on several other sites and listening to radio and Tv and social media and the majority are against this type of behaviour.
You clearly think posters are naive and virtuous when they discuss an issue which is in the public domain,and is being discussed all over the media,I don't see what your problem is,if its that you dont like what your reading ,then dont read the posts,because that is how people feel and if you don't like it or choose to call us naive and virtuous perhaps start a new thread,like " say nothing about anyone,because everyone else is at it"!

Fair play to him for not lying down and being bullied. I wonder if any small suppliers of Dunnes Stores have ever considered taking out a hit on Margaret... I think the key point is that he didn't actually hire a hitman, but let them think he had, another area where there's a huge distinction.

Quite frankly what you have said above is a disgrace! Threatening people is not an answer,and next thing you know sure the milk man/mortgage providers/white van man/suppliers will be threatening to knee cap the customers who dont pay up,and then say "Only messing!!

mandlebrot:

And you've just proven my point, because I see audited accounts across my desk everyday, and I've seen cases identical to what I've described.

Are you saying that what Mick Wallace did is the norm? Are you also saying that ,even though its illegal,that its happening everyday?
You say they cross your desk everyday, so you are aware of this type of trading? Are you obliged to report something like this when you know and have evidence that something illegal is being done?
If something crossed my desk everyday which I knew was someone chancing their arm,I would at the least feel obliged to report it.And if in a professional capacity,I would have thought you would be obliged to do the same,if that is the case.
Either way the fact that you say there are many more doing the same thing,makes it no less illegal.

 

[mandelbrot]

So you have seen audited accounts everyday showing a company is deliberately not paying or under paying VAT because they cant afford it for a prolonged period of time with no note to the financial statements or comment from the auditor? And these companies are simply sticking an accrual on the balance sheet?

No, I didn't say I see it every day! But I have seen it plenty of times, to varying degrees, in the If the VAT is accrued as part of the outstanding VAT creditor then the accounts are true and fair. It's only if the VAT isn't disclosed that the accounts may not be true and fair.

Must make audits very easy for Revenue. Just ask for the balance sheet of every company and the avoidance of tax is there in black and white.

Who are you telling
And that's why Revenue have been running campaigns in various districts in recent years doing just that (not as an audit but an aspect query).

 

[mandelbrot]

You are coming across as defending him,which may not be intentional.
Just because we have an Ireland which is full of people who will chance their arms,does not make a discussion of the Mick Wallace issue irrelevant.

Oh I'm not saying that we shouldn't be discussing it - I'm really just trying to play devil's advocate here, and point out that the comparisons between him and Paul Begley are a bit wide of the mark.

Id say you are very wrong there, as I have been on several other sites and listening to radio and Tv and social media and the majority are against this type of behaviour.
You clearly think posters are naive and virtuous when they discuss an issue which is in the public domain,and is being discussed all over the media,I don't see what your problem is,if its that you dont like what your reading ,then dont read the posts,because that is how people feel and if you don't like it or choose to call us naive and virtuous perhaps start a new thread,like " say nothing about anyone,because everyone else is at it"!

Well obviously anyone talking in the mainstream media are going to be spitting vitriol (regardless of whether they actually couldn't care less), it's grist to their mill!
Maybe we can come back here next week when the list is published and have a look at some of the other people who have big settlements against their names, and condemn them as well. We might have people who occupied positions of trust or responsibility, and we can single them out for special condemnation...

Quite frankly what you have said above is a disgrace! Threatening people is not an answer,and next thing you know sure the milk man/mortgage providers/white van man/suppliers will be threatening to knee cap the customers who dont pay up,and then say "Only messing!!

The subtlety of the thing is going over your head! He never threatened anyone; he merely made a suggestion to someone, whom he was fairly sure would repeat the story. The power of suggestion...!

mandlebrot:
Are you saying that what Mick Wallace did is the norm? Not the norm but it happens.
Are you also saying that ,even though its illegal,that its happening everyday? Again, it's not the norm, but I'd say at a very rough guess that at least 5% of companies have accrued undeclared taxes on their balance sheets, of varying levels of materiality.
You say they cross your desk everyday, so you are aware of this type of trading? Are you obliged to report something like this when you know and have evidence that something illegal is being done? You don't know what my job is, or in what capacity I'm looking at these things! I don't necessarily see a M&J Wallace situation everyday, but it does crop up.
If something crossed my desk everyday which I knew was someone chancing their arm,I would at the least feel obliged to report it.And if in a professional capacity,I would have thought you would be obliged to do the same,if that is the case. Trust me, I take my job very seriously and I do exactly what I'm supposed to. The fact that I am saying that I don't think what he did was comparable to Begley, doesn't mean that I wouldn't take it very seriously if I came across it.

Either way the fact that you say there are many more doing the same thing,makes it no less illegal.

Agreed, and I'm not talking about illegality; what I'm suggesting is that a person's motives in doing a thing are always relevant (hence the distinction between manslaughter and murder!), and a majority on here appear to be happy to assume the worst of Mick. I'm not even suggesting that I believe his assertion as to his motive. All I'm saying is that I won't be rushing to assume the worst.