Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
INDEPENDENT TD Mick Wallace has pledged to devote half of his Dáil salary to meeting his construction company’s settlement with the Revenue Commissioners.
In a statement to the Dáil yesterday evening, Wallace said he regretted the “error of judgement” in not disclosing M and J Wallace Ltd’s full VAT liability to the Revenue Commissioners for 2008.
But how long will it take for Wallace to repay the full amount? We’ve dug out a quick Excel spreadsheet to try and work it out – and the answer isn’t an encouraging one for the 56-year-old TD.
First of all, we should mention the ground rules: we’re making the hypothetical assumption that Wallace will remain a TD for the rest of his life.
We’re also assuming that he isn’t including any of his parliamentary allowances in his calculations – as those payments are paid under strict terms and conditions, which would not allow for the cash to be deployed for personal reasons.
Therefore, we’re not including the €27,000 in unvouched travel expenses that Wallace is entitled to claim from his Dublin address (which he uses for parliamentary duty), nor the €41,152 in the unvouched ‘leader’s allowance’ that independents are entitled to (but which Mick does not claim).
The one thing we’re not sure of is whether Mick intends to devote half of his gross salary, of €92,672, or his net salary after he pays income tax and the Universal Social Charge. It’s possible that Wallace will intend to devote half of his gross wage, leaving himself with less than half of what’s left after taxes.
Therefore we’ve done two corrections – one with each, using TaxCalc.ie’s online calculator to estimate that Wallace’s after-tax salary is €55,615.
M and J Wallace Ltd’s full settlement – as listed in the Iris Oifigiúil on Tuesday – is €2,133,708. TDs are paid on a monthly basis, at the end of each month – so we’re assuming that Wallace’s pledge will begin to take effect in a fortnight’s time.
If we take half of Wallace’s gross salary, it’ll take 553 months (at €3,861.33) – that’s 46 years and one month – to pay the full €2.13 million settlement. By then, June 2058, Wallace would be 102 years old.
It’s even more grim for the TD if we deal with half of his net salary, which works out at around €2,317.29 per month. It would then take a whopping 921 months – that’s 76 years and 9 months – to pay off the full debt, bringing him up to February 2089, when he would be 133.
This is also predicated on the assumption that the Revenue liability does not accrue interest in the meantime. So, if M and J Wallace Ltd does not successfully emerge from receivership and begin to trade successfully again, its proprietor will be spending a long time paying back its debts.
Coupled with the €19.1 million judgment secured by ACC Bank against both Wallace and the company last year, it’s more likely that bankruptcy proceedings will eventually be taken – a move which would disqualify Mick from membership of the Dáil.
To embed this post, copy the code below on your site
bankruptcy?
If a fraud was perpetrated, then criminal prosecution and custodial sentence seems a bit more appropriate…
when i was a young lad many moons ago my grandmother used to refer to ireland as “not the island of saint and scholars but the island of rogues and robbers ” how true it was and still is and always will be on the green little septic isle of ours,dunphy was right the people are great but its a kip!!!!
Why is this clown not sacked???
We just have to keep votting him back In so he can pay back the vat with our money we pay him to be a td ……..hang on …….
No no, the small print in this agreement states that he is automatically returned as a TD until his death or the money is repaid – whichever comes first.
Of course, he’ll only contribute the half of his earnings – that we know of.
Hang on am I getting this right, he gives half back, which our taxes paid for to go to German banks, or we put him in jail and it costs another €77k per year. Hmm, what about a slap on the wrist, 3 months in jail, €15 k, no money to Berlin, no Dail seat or pension cos a jailee cannot serve, we leave him to run his business, keep people employed and pay some tax?
Because the country overwhelmingly voted in favour of the fiscal treaty stoopid
It’s a token gesture from Wallace really isn’t it ? The debt will never be paid off from half his Dail salary whether gross or net. Maybe his company will be able to trade successfully and pay off the debt. But isn’t he in partnership with someone in that company ? How come we’re hearing nothing about that person ? Wouldn’t they be liable as well ?
We have to be the laughing stock of the world. How we continuously turn a blind eye to this type of corruption. As was stated in an earlier post, this gesture sees a tax evader pay back his debt with tax payers money. That’s like getting a loan from the bank to pay the bank back. Is it any wonder the country is in the state it’s in .
The worrying thing Kevin, is that so many people don’t see anything wrong with him hanging on on there at our expense, at the basic human level I do have sympathy for anyone in trouble even doing stupid things, but for heavens sake, those in high office must have high standards or we lose any credibility we still have.
Kevin! What you say is basically right, however Mick Wallace is not a tax evader! He’s a thief! He stole our money! How many bank robbers get the option of paying back money they stole? Thieves belong behind bars, and if Mick Wallace thinks this pathetic gesture might get him off the hook, he’s sadly mistaken! Do politicians really think that the decent people of Ireland are prepared to tolerate this crap anymore?
Yes, they do think that Rodrigo and they are safe in their assumptions ..
About as long as it will take the government to cancel the pensions of Pee Flynn and Bertie aherne as in Never!
So if you import garlic and call it apples you get 6 years in prison for avoiding VAT but if you are a builder and a politician you get …. what exactly? to keep your job, pay back half of your wages (is that before or after tax?) and later on disappear into no man land and live on the state pension? If this is allowed then this country is a lot worse off than anyone really knows!
If you import garlic and call it apples you are not trying to avoid VAT – there is no VAT on either garlic or apples.!
It would be nice to see him win the Euromillions.
Bertie could give him tips for horses.
Wouldn’t interest be due on the outstanding amount?
OMG! Are independents entitled to 41,000 euro a year in “leader’s” expeneses???? WTF? Who do they lead? Unbelieveable!
Can’t he just swap debt for a piece of paper with a promise as our government does?
am I missing something here. he has admitted to fraud. why were the police not waiting outside the Dail yesterday to arrest him
A man was sent to prison for non payment of tax on garlic! Was no where near what this sham owes. He should be sent to prison.
How long do you have to act as a td before you are entitled to a pension?
Two years. He’s not guaranteed an Oireachtas pension unless he remains a TD until February 2013.
Only two years!!
The man has created more jobs and payed more tax over the years than any of them muppets in the dail who have been getting fat on lavish expenses paid for by us. How was it Bertie Ahern or Michael Lowry didn’t resign their seats? Fine fail and fine Gael have been shown to be corrupt as f*ck for years , and sinn fein are a collective group of terrorists, drug and fuel smuggling knackers. There’s no party worth pissing on that ballot paper for. We need independents like mick , this whole debacle has just been more spin doctor mudslinging from the government
That makes it alright then, just because Bertie and Lowry are dodgy also. I don’t think I’ll pay the VAT next month and double my pay instead.
You are one sad foolish little lamb Gerard.
We most certainly do not need more of the likes of him or those in technical group that support him. If the property bubble had not burst he would still be a builder and not TD !!!
It will take 87 years .
Ok something in this article just caught my attention and made me sick. He gets around 20,000 a year in travel expenses and 40,000 in expenses , that’s over 60,000 a year. There are 166 TDs getting this and IF all them claim . .THATS OVER 8 MILLION!!!! What is wrong with this country!!!!
They don’t all get the 40k party leaders bit. For some mad reason independents get it though. That’s not to say though that they don’t cost too much, they sure do!
@Reg – That’s true, but a bit incomplete. The leaders of the political parties get allowances based on the number of members their parties have, which results in Enda Kenny getting €2.2 million or so every year for the lifetime of this Dail. That money then goes into the party coffers to fund the likes of researchers, press officers, etc etc – all of the same stuff that independents would use the €42k to pay for.
Thanks Gavan for the clarification.
I have been kinda following this and really don’t know what to make of the whole affair. He done some stupid things with his companys VAT returns that there is no doubt about. The fact that he appeared on the defaulters list in the first place means that it was Revenue rumbled the underpayment and based on commentary it would seem that based on the level of penalty that no early disclosure of the underpayment was forthcoming. There are other taxpayers on the disclosure list with higher liabilities so it was by no means the worst default ever although the coverage might have you thinking otherwise. Even before he became a TD he was a “reasonably high profile developer” not in the Sean Dunne and Johnny Ronan sense but hi profile none the less, a profile which to be fair was as a result of his social activities (Soccer etc) rather than his development activies so if he had not become a TD then he might have got some newspare coverage over and above say the Hsopital consultant in Cavan or the Fishing company in Killybegs but that would be all gone in a few days. What mystifies me is why he then chose to run for the Dail knowing that (a) hhis lenders were closing in on him (Receivers have been appointed to several of his companies) and (b) knowing that this tax audit was probably moving towards conclusion and that there was a good chance that it would be published. I just don’t get that. the only reasons I can think are that he must have thought that by being a TD he would somehow be protected from all of that. Well we all now know how that has worked out.
As regards the offer to pay half the salary I cannot make up my mind whether it is a stupid, meaningless or dangerous gesture on his part. The debt is not that of Michael Wallace it is the debt of the company, a seperate legal entitly albeit an entity owned and controlled by Michael Wallace. Which to most people is one and the same thing but it is not. Certainly the bank receivers will be watching this with interest and will now be asking him why won’t he pay them back so he is bringing more trouble on himself which he could potentially spend the rest of his days paying for even though he has no legal obligation per se to do so.
There are mechanisms to make him personally liable for the debt but this involves having the company liquidated and all sorts of hoops to be jumped though which someone will have to pay for but I don’t think anyone wants to pay for that so it is unlikely to happen.
Of course if we had up to date and modern bankruptcy laws here as in the UK it would never have come to this as he would have declared himself bankrupt long ago and by now would have emerged well on the road to discharge.
I can only conclude that he is going to tough it out until he qualifies for the Dail pension and will then resign, move to the UK and declare himself bankrupt there. thats what I would do if I were him.
If he declares himself bankrupt, he loses his Dail seat
Yes indeed he does automatically lose his dail seat but it won’t come to that. The point I was making is that once he has his dail pension banked he then resigns his seat, moves to the UK to estabish his centre of vital interests there (bit difficult to do that while still a TD) and after 6 months goes the same road as Shane Filan and others, 12 months later he is discharged from bankrupcy and his pension is safe. It allows him to start again and who knows what he may contribute in the future to society which may to more than pay off the debt
He’ll have his pension by then.
Ok if that’s the way it goes- I am goin to pay my mortgage over the next 102 years I think that should b ok
tax evasion is illegal but tax avoidance is not funny old world we live in. they are basically the same thing, he should of set up shop in luxemburg,
It was neither evasion or avoidance. The money wasn’t his to begin with. He collected VAT from his customers and failed to pay it to the revenue. In a grown up country they call that theft or fraud.
Good article
More importantly why is he driving a left hand drive car?
He should have quit already. How arrogant is it that someone thinks they can be part of running a country when they can’t even manage a business?
A thundering disgrace! Rory Hearne
In his statement Mick Wallace alludes to an instalment arrangement which subsequently broke down. He doesn’t state how much the instalment arrangement was for, but in general, Revenue arrange these over a 40 month period with an up-front payment of 25% of the total. However in order to obtain a tax clearance certificate, which Wallace states the company received, the up-front payment amounts to 40% of the total. If that were the case, and Wallace doesn’t at any point state the remaining balance, then the amount due to Revenue might be less than the 2.1 million figure.
The tax system is very complex as is the legal system. As a result you need experts like lawyers and accountants to navigate it successfully. Therefore the system is prejudiced in favour of those who can afford these experts. This can be expresse d in this mathematical equation:nnComplex tax system Experts money to pay them= Wealthy 4 – 0 Everyone else.
He only lives in Wexford and the Dail only sits for three days( friday seems to be just a token gesture) so why does he get an allowance for a house in Dublin? Also it was his decision not to pay the VAT so why does he keep trying to seperare Mick Wallace the TD from Mick Wallace the developer? We keep putting up with this crap but as long as the TD’s make up their own rules nothing will change.
@Seamus – Sorry if the piece wasn’t clear on this point. Mick doesn’t get an allowance FOR a house in Dublin, he actually LIVES in Dublin – his main address is in Clontarf, and he uses that address for parliamentary purposes. (What most people don’t realise is that you don’t need to live in a constituency in order to run for election there – this is how some candidates choose to run in more than one constituency at a time, as a couple of people did last year.) This means that he gets lesser expenses, as the travelling distance between Clontarf and Leinster House is clearly shorter than the distance from Leinster House to Wexford.
So it’s not the case that he gets paid FOR a house in Dublin, it’s actually the opposite – he gets less BECAUSE he’s in Dublin, rather than using an address in Wexford.
he should take his Michael landon perm and go
Interest continues to accrue on the tax element of the debt on a daily basis. There is no interest on the interest and therefore, if you get wage inflation (you wish!), then in real terms the debt may actually reduce over time.
Mick Wallace should not pay any money to Government – they will just waste it like the rest of the money. Instead he should use it to pay for a few S N As or home helps.
Thanks for that Gavan
So, just checking up on this. Is Mick Wallace paying anything back to revenue? Has he paid anything. What’s left to pay? Some transparency on this would be nice for the public.
There is a petition on a site asking for Wallace to resign. Only 12 people have signed it, says alot doesnt it! So much for people power!
but what other assets does he have which arn’t in control of banks already?
have your say