The High Court has rejected Viera Limited’s challenge to a Revenue VAT assessment arising from the construction company’s treatment of residential property sales.
Revenue began examining Viera after figures submitted with a corporation tax refund claim showed sales substantially higher than those reported for VAT purposes. A VAT audit commenced in August 2005 and was later extended back to January 2002.
Revenue was told that Viera had entered licence agreements with McPeake Auctioneers under which dwellings were temporarily let to the auctioneer. Viera’s tax treatment sought to calculate VAT by reference to the lower value of land or buildings rather than the full selling price. Revenue auditor Aidan O’Brien rejected that treatment.
Two assessments were calculated in December 2006 and communicated in a notice stating a total of €3,085,021. Viera appealed administratively and later brought judicial review proceedings, arguing that Revenue could not have had the statutory “reason to believe” VAT was due because officials continued seeking information in 2007.
Mr Justice O’Neill rejected that argument. He found that O’Brien already had extensive financial statements, VAT returns, sales information and material obtained during the audit. That was sufficient to support a reasonable conclusion that additional tax was payable; Revenue did not need every possible fact before raising an assessment.
A second dispute concerned the statutory four-year time limit. Revenue accepted in 2009 that the assessment for September 2002 to August 2003, stated as €1,140,681.58, was out of time. Viera argued this invalidated the entire notice because it represented one assessment.
The court disagreed. It held that two separate assessments had been made on December 13, 2006 and merely communicated together in one notice. The second, covering September 2003 to August 2004 and stated as €1,944,340, was within time and valid.
The court also found Viera’s belated attempt to add the time-limit ground involved gross, unexplained delay. All judicial review relief was refused.