Revenue fails to clarify how it will f ix VRT wrongdoing

Tax off icials misused powers at roadside checks

REVENUE bosses are refusing to clarify if they have done anything to rectify cases in which tax officials misused their powers when they seized foreign-registered vehicles and issued large fines to owners.

The cases involve the improper use of Vehicle Registrations Tax (VRT) laws by Revenue officers, which was highlighted in a Tax Appeals Commission (TAC) ruling.

In the 2021 ruling, TAC commissioner Marie-Claire Maney, admonished Revenue officers for behaving in an ‘illogical’ and ‘misguided’ manner when they applied VRT residency rules. As a result, an unknown number of people may have had their vehicles unjustly seized or been illegally subjected to significant fines and VRT bills.

Central to the ruling is a normal residence test Revenue is supposed to apply when deciding if a foreign-registered vehicle should be subject to VRT.

By law, any vehicle belonging to an Irish resident that has been in the State for more than 30 days is subject to VRT.

At roadside checks, Revenue officers can seize vehicles or issue fines if they believe a driver is in breach of this law.

But according to the TAC ruling, Revenue ‘failed to follow the correct steps… in determining normal residence’.

The ruling stated Revenue ‘should consider its procedures’.

The ruling could have farreaching and costly implications for the exchequer if Revenue’s VRT procedures are found to have been improperly carried out on a widespread basis.

But when asked by the Irish Mail on Sunday, Revenue refused to indicate how widespread the issue may be and whether any compensation had been paid.

Revenue also declined to say whether it has attempted to find out how many flawed cases there may be – and whether it had contacted those improperly fined or levied to rectify this wrongdoing.

Under 1993 VRT laws, Revenue has stopped as many as 35,000 foreign-registered vehicles at roadside checkpoints in the past 30 years.

In most cases, drivers were forced to pay on-the-spot fines amounting to 10% of the car’s value to prevent the vehicle from being seized. This ‘seize and release’ measure, is based on residency rules.

For VRT purposes, a person’s legal country of residence is where they spend at least 185 days a year.

The MoS has learned of several cases in which drivers claim they have been improperly treated.

In one case, UK-based lawyer, Jason Tann, is suing Revenue after his Range Rover was seized in 2018 when he refused to pay a €5,500 roadside fine.

Afterwards, Revenue determined no VRT was due and offered to return the vehicle if Mr Tann’s legal action for damages was dropped – something he refused to do. Revenue dropped this condition in mid2021 after Mr Tann raised concerns about the potential abuse ‘of the prosecution process’ by Revenue. A hearing in the case is pending at the High Court.

Meanwhile, in November 2021, the TAC ruling against Revenue confirmed that, in some cases, officers had been applying the wrong test to establish if someone was resident in Ireland. The MoS this week asked Revenue a series of questions about what had been done since the 2021 ruling to ensure that any incorrect seizures, fines or VRT charges were rectified.

Revenue did not answer these questions directly and declined to specify if any refunds or compensation had been paid.

Instead, in a statement that ignored our questions, a spokesman said Revenue’s mission was to collect taxes ‘fairly and efficiently’ and that it ‘continually reviews its process and procedures to ensure compliance’.

The Office of the Ombudsman confirmed that it had received 30 complaints relating to VRT in the past three years.

A spokesman added ‘at present, the subject of VRT residency procedures is not the subject of an Ombudsman systemic investigation’.

‘Potential abuse of prosecution process’