SENIOR BANK directors and managers have received letters from the Revenue Commissioners asking whether they have any unpaid taxes to disclose and to confirm their tax affairs are in order.
Letters have been distributed by the Revenue’s large-cases division, which monitors the tax affairs of the wealthiest individuals and companies in the country, to bankers at their home addresses.
The Revenue has written to senior managers and directors at the six Irish-owned financial institutions guaranteed by the State seeking clarification that they have no outstanding tax issues.
Senior managers and higher-paid staff at Irish Nationwide and Bank of Ireland received letters from the Revenue in recent days as part of the review of tax compliance within Irish banking.
The letters were signed by Revenue official Breda Ruddle, who is in charge of the high-wealth individual unit within the large-cases division. A spokesman for the Revenue declined to comment.
Bank executives at a number of lenders received letters in recent weeks asking them to disclose any outstanding taxes by a particular date before Revenue started examining their affairs. They later received a second, follow-up letter saying the review had begun.
Employees earning more than €100,000 a year at one financial institution have received letters.
Bank managers at another institution who received the letters on Wednesday were asked to confirm in writing that they had no outstanding tax issues by next week.
One senior banker described the Revenue’s move as “a fishing expedition” to assess whether executives across the sector were tax compliant amid the heightened focus on senior bankers’ pay.
The letters were general in nature, and did not disclose what taxes the Revenue were targeting.
It emerged last month that the Revenue is investigating the payment of special cash top-ups to senior bank executives, with a particular focus on high earners whose private pension funds had reached the €5 million limit.
However, senior bankers said that the Revenue’s trawl did not appear to be limited to investigating only pension payments.
The Government capped private pensions in 2006 to ensure that individuals would not be entitled to offset taxes against any pension contributions above the limit.
A Government-appointed committee set up to assess bankers’ pay said in its report last March that cash allowances had been paid “to compensate for the effects of the pensions cap”.
“It is unacceptable that arrangements should be put in place which would be inconsistent with the intent of the relevant legislation,” the committee said.
The Department of Finance has said the Revenue was investigating pension payments “to make sure they are above board from a tax and pensions perspective”.
