The chairman of the Ulster Bank group, Sir George Quigley, told the Dail Public Accounts Committee hearings last year that the bank's liability for unpaid DIRT was likely to be "very, very considerably less" than £900,000 (€1.14 million).
The Revenue and the group yesterday announced a settlement of £4.2 million, comprising a liability of £1.7 million and interest and penalties of £2.5 million.
Sir George told the committee last December that discussions with the Revenue would establish the precise figure but that it would be "a lot less" than a £900,000 estimate which have been given "quite a lot of currency".
The Comptroller and Auditor General, Mr John Purcell, in his report for the PAC hearings, said the Ulster Bank group's financial controller had come up with a potential DIRT liability of £900,000. The controller had said that this was his "most pessimistic calculation" and one which the executive considered "excessive".
The PAC inquiry heard that the bank found "five or six" bogus accounts since Sir George had become chairman in 1989. However, a review of documentation in 1991 had found that in only 25 per cent of cases was it satisfactory. Following this review, a memo was sent to all branches, stating that any breaches of the rules would be considered a serious matter.
Mr Oliver Lynas, the head of group compliance, told the hearings that the six bogus accounts discovered since 1989 had been closed and the money returned to the depositors. The business was not wanted, he said.
The bank was under great pressure because it was expanding in a buoyant economy, he said, but tackling the bogus non-resident account issue was "very much at the top of our agenda".
In his evidence to the September hearings, the group's chief executive, Mr Martin Wilson, expressed doubt that persons wanting to evade tax would purposely complete inadequate declaration of non-residency forms. However, he agreed with the PAC chairman, Mr Jim Mitchell, that the law on DIRT compliance was precise and that where the paperwork was incomplete, the bank was obliged to deduct DIRT from non-resident accounts.
Mr Purcell's report stated that the Ulster Bank group had 3.46 per cent of the non-resident deposit market on November 30th, 1998, and that in 1998 non-resident accounts made up 8.9 per cent of the value of the group's deposit book.
Last month the Bank of Ireland made a £30.5 million settlement with the Revenue arising out of its DIRT audit. The settlement comprised a liability back to 1986 of £12.75 million, and interest and penalties of £17.75 million.
Bank of Ireland's group chief executive, Mr Maurice Keane, told the DIRT hearings in September that it had estimated a potential DIRT tax liability of between £1 million and £1.5 million, before tax and penalties.
Yesterday's outcome for Ulster Bank means the group's own estimate of its liability was out by a factor of at least 2, (i.e. £1.7 million as against less than £900,000). The Bank of Ireland's eventual settlement means that group was out by a factor of, at best, 8.5 (i.e. £12.75 million as against £1.5 million).
There are a further 35 deposit taking institutions yet to make a settlement with the Revenue, with the amounts involved set to vary hugely. The AIB settlement is expected to be the largest, with the bank's own estimate being £35 million, including interest and penalties. ACC has said it estimates its likely total bill being between £1 million and £17.5 million, while NIB has put aside £1 million to pay for any potential liability.
