Revenue to probe 10 redundancy deals due to tax concerns
THE Revenue Commissioners are set to probe 10 exit packages that RTÉ may have wrongly applied tax exemptions to.
An independent review into a 2017 Voluntary Exit Programme (VEP) by legal firm McCann FitzGerald for RTÉ found that the roles had to be filled ‘within a short time period’ which they believe made it contrary to the legal requirements.
The report states that the ten VEPs were approved and termination payments, including statutory redundancy payments, were paid.
However, in the view of McCann FitzGerald they did not ‘satisfy the requirements of a redundancy within the meaning of the Redundancy Payments Acts’.
‘Accordingly, our view is that Revenue Commissioners may take the view that RTÉ was not entitled to apply the tax exemption applicable to statutory redundancy payments to the VS Redundancy Lump Sums received by employees whose roles were indirectly suppressed, and subsequently backfilled,’ the report says. The amount paid to the 10 individuals was a combined €223,010, with €103,587 of this being tax-exempt. The report notes that the reasons for approving VEPs were ‘varied’ but that Revenue ‘may take the view that RTÉ should not have applied the tax exemption applicable to statutory redundancy payments to the payments received by some or all of these individuals’.
‘This will however be a matter for the Revenue Commissioners to determine,’ the report says.
The terms of reference limited the scope of the report to 2017 and 2021 exit packages. However, Revenue could opt to mount their own probe into other historical packages.
A spokesman for RTÉ told the Irish Daily Mail that they have written to Revenue to inform them that the 10 did not meet the criteria and said it will pay any liability arising from the error.
‘RTÉ recognises that Revenue may take the view that RTÉ should not have applied the tax exemption applicable to statutory redundancy payments to the payments received by some or all of these individuals, and that ‘this will… be a matter for the Revenue Commissioners to determine.
‘However, the report clarifies that, under the rules of the 2017 VEP, it was within RTÉ’s power to accept voluntary severance applications where the criteria for the 2017 VEP were satisfied, even where a statutory redundancy did not arise.
‘RTÉ will cover any tax obligation determined by
Revenue,’ the spokesman said.
A spokeswoman for the Revenue Commissioners said that they are ‘precluded under the provisions of section 851A of the Taxes Consolidation Act 1997 from commenting on the tax affairs of, or interactions with, any individual, business or entity’.
Speaking on RTÉ News, director general Kevin Bakhurst said that he was
‘Shocked’ when he learned
‘shocked’ when he learned of the practice and said measures have been put in place to ensure ‘this can never happen again’.
The probe into the VEPs was prompted after former RTÉ chief financial officer Breda O’Keefe told the Oireachtas Media Committee that she had received an exit package.
A week later RTÉ director of audiences and channels Adrian Lynch told the committee he only learned that Ms O’Keeffe received a package when she told the Oireachtas committee the week previous and that it had not been brought to the attention of the RTÉ Board.