A farmer who received €140,656 under the Scheme and did not include it in his annual tax returns received a Revenue demand for €72,728 which they claimed was a tax liability on the Scheme’s payment.
The farmer appealed their demand to the Tax Appeals Commission.
It was argued on the farmer’s behalf that the Revenue Commissioners were out of time to issue the amended assessment under tax law which imposes a four-year time limit.
The Appeal Commissioners agreed that the Revenue Commissioners were incorrect to issue the demand as it ruled that the assessment was outside the time limits under the Tax Acts and directed that the assessment be reduced to zero.
The Appeal Commissioners, on reviewing the facts, were satisfied that the farmer’s tax return for 2011 was ‘complete, accurate and truthful’. It ruled that it was immaterial whether the Scheme’s payment to the farmer was taxable as the Revenue Commissioners were out of time in issuing their amended assessment.
The farmer had several land interests during the year of the assessment and in May 2011 incorporated his farming business into a company along with transfers of assets and the herd numbers. In October 2011 he received the €140,656 payment under the Scheme to his bank account and the sum was subsequently transferred to the bank account of the new company. The farmer did not include the Scheme’s payment in hie personal income tax return for 2011 but did include it in corporation tax returns for the year ending May 2012.
A Farmer v The Revenue Commissioners Tax Appeal Commission, April 2023.