MRS BROWN AND HER TAX-AVOIDING BOYS (AND GIRL!)
Paradise Papers reveal sitcom trio used offshore accounts
THREE of the stars of Mrs Brown’s Boys funnelled hundreds of thousands of euro through offshore accounts as part of an elaborate plan to avoid paying tax.
The Paradise Papers show Fiona Delany, the daughter of Mrs Brown creator Brendan O’Carroll, her husband Martin Delany and Paddy Houlihan all used a scheme set up by controversial accountant Roy Lyness to avoid paying tax on more than €1million of income.
The money was paid into offshore trust funds in Mauritius and the three actors named were then able to ‘borrow’ from these
trusts without ever paying the money back.
Each of the three Mrs Brown’s Boys stars borrowed hundreds of thousands of euro from the untaxed money deposited offshore, with total deposits to the fund greater than €1million.
Mr Houlihan claimed he regularly signed documents he didn’t understand and had to google ‘tax avoidance’ when he was first approached by journalists from BBC’s Panorama about the scheme.
According to the leaked Paradise Papers – a tranche of 13.4million leaked documents revealing the tax affairs of some of the wealthiest people originating from the offshore law firm Appleby and verified by the International Consortium of Investigative Journalists – accountant Roy Lyness helped set up meetings that led to the actors taking part.
Mr Lyness was also behind the controversial K2 scheme, which, in 2012, was found to be allowing thousands of the super-rich to pay as little as 1% income tax. Clients included comic Jimmy Carr, who issued a grovelling apology before withdrawing from the scheme.
Mr Houlihan, who plays Dermot Brown in the show and Mrs Brown
‘You never knew what was going on’
D’Movie, was seemingly aware of Mr Lyness’s chequered past.
He told the Irish Times he joined the scheme without properly understanding it, but also said that Mr Lyness assured him it was above board. He also claimed to be speaking on behalf of Mr and Mrs Delany, who play Maria Brown and Fr Trevor Brown in the hit show created by her father.
Mr Houlihan said: ‘You never knew what the f*** was going on. I was told the money went to a trust and it wasn’t mine until I received it, and I didn’t have to pay any tax until I got the money. I was in control of when I would pay tax.’
Mr Houlihan sought advice from Mr Lyness when he got into difficulties with his tax bill.
Two other stars of the show, Amanda Woods, who plays Betty, and her husband Danny O’Carroll, who plays Buster, also signed up for the scheme operated by UK tax advice firm Aston Court, but did not use it. It is alleged that Mr Houlihan and Mr and Mrs Delany allowed some of their money to be transferred into a Mauritian trust, instead of being declared in a normal fashion, before it is eventually ‘loaned’ back to them. The suspicion is that the ‘loans’ were created artificially with the purpose of avoiding tax and that none of them were repaid, meaning they were, in effect, a form of income and so should have been taxed.
According to the reports, a firm called Aston Court used offshore trusts and companies to turn money that would have been classed as income in Ireland and the UK into loans.
Income is subject to national insurance and tax of up to 45%, but loans are free from both.
All five stars were allocated cell companies and trusts based in Mauritius, linked to offshore trusts run by Aston Court.
Earnings by the three stars who availed of the scheme were paid to UK company Pro Fid Ltd, which transferred the money to Mauritius, either straight into the actors’ cell companies or via a trust run by Aston Court. The actors then each signed a contract to act as an ‘investment adviser’ to their own cell company, and supplied monthly advice on what should be done with the money.
But while the paperwork described the cell companies as being related to UK property and
‘I was told it was fully legal’
shares, in practice the actors almost exclusively recommended making loans to themselves, which were arranged at commercial interest rates and had repayment dates, but were never repaid.
Over a period of more than two years, it is estimated more than €1.7million was transferred into the cells linked with Mr and Mrs Delany, and with Mr Houlihan.
By the end of 2015, Mrs Delany had borrowed about €340,000 from her cell company and was holding more than that in cash offshore, and her husband had done much the same. Mr Houlihan had borrowed about €220,000 and had more left in his offshore cell. He told the Irish Times he thought the loans had been repaid, but admitted: ‘Honestly I don’t know if the loans have been paid off.’
Mr Houlihan said he had always believed the scheme was above board: ‘The first thing I thought of was the Jimmy Carr thing, but I was told it was fully legal.’
When he received a letter in 2015 advising him that the repayment date was approaching for his first loan of £65,625 issued in February 2014, he asked Mr Lyness for help.
Mr Houlihan said: ‘I forwarded it to Roy Lyness and asked him, “how do I handle this?” He said, “don’t worry about it”. I don’t recall getting another letter.’ Mr Houlihan said he was required to write a letter every month with advice for the trust, but told the Irish Times that when he did recommend an investment: ‘They didn’t want it.’
Each actor was also given an account with AfrAsia bank in Mauritius so they could see their balance online, and a credit card which Mr Houlihan said was for expenses run up in their work as advisers of their trusts.
By 2015 employees in offshore law firm Appleby were beginning to worry about the non-payment of loans, with one lawyer writing in an email seen by the Guardian: ‘My view is that if loans provided are not serviced by frequent interest payments or principal repaid by the due date, there is no difference between K2 scheme (the scheme invested in by Jimmy Carr) and the ones being set up here.’
Brendan O’Carroll is not involved in the offshore activity. He told the Irish Times that neither ‘myself, my wife, or any company associated with Mrs Brown’s Boys are now or ever have been involved in any tax avoidance scheme’. Comment – Page 12
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