Marty Morrissey Tax on Car

DUBLINIRL

Could someone explain the tax treatment for Marty's car?

https://www.thesun.ie/tv/10996190/marty-morrissey-rte-car-loan-tax-clarity-grey-area/

wally1990

Currently, Benefit in Kind is only on Employer provided non cash assets eg cars but Renault weren't his employer and there isn't a "tax rule" that states benefit in kind is payable on third party provided assets/perks

Side note : It's a weird one, because benefit in kind is deducted from your salary by your employer by adding the perk to your wages and deducting the tax

But again, Renault aren't his employer so they wouldn't have done this

I'm not sure if a tax bill will even come of this story

But it does open up a loop hole in the tax system

cdeb

If Renault were providing him a car, would there not have been an obligation on then to put Marty on payroll and return BIK that way?

After all, they're effectively paying him (that's what BIK means)

wally1990

https://www.boards.ie/discussion/comment/120816574#Comment_120816574

"Logically yes" but there isn't anything in the tax law for that , weird I know

Nermal

Where's the loophole? This is income. It's non-cash, but still income.

It's up to Marty to calculate the monetary value of the use of the car (just ask what it would cost to lease it) and declare it himself.

doc22

It's taxable, it just depends under what banner

Third party benefits https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/other-benefits/third-party-benefits.aspx .

Could marty be seen as an employee of Renault and Car use wa his payment.

CAT- for use of car

It might have been Renault rather then Marty that pulled the use of the car too.

mcgragger

Who paid the road tax, insurance and NCT ?

blackbox

Did he hand back a 5 year old car or did he get a new car every year?

ebbsy

What this has done is given the Revenue another avenue to look down ( i.e. vehicles) when they go in to do their trawl.

5 years...loads of back tax and interest and penalties to be hoovered up there.

doc22

https://www.boards.ie/discussion/comment/120816574#Comment_120816574

They weren't paying him so there was no money to take any tax from

cdeb

https://www.boards.ie/discussion/comment/120816619#Comment_120816619

That's a good point in fairness. I suppose that puts the responsibility back on Marty to account for it in his own tax return?

(I don't buy wally's loophole argument I'm afraid)

apogee87

https://www.boards.ie/discussion/2058304026/marty-morrissey-tax-on-car

This is the best PR job i ever seen. The story is now about Marty's car, a few grand for slippers and some events none of which i agree with.

However the real story is likely billions wasted on overpaid presenters, managers that are unaccountable, i heard a manager saying this was affecting her mental health so she should go to the doctor and take sick leave. The real storyis is now a side-show as this all about things that are pretty regular commercial arrangements, like company cars etc. To me all of this diverting from the real story. Whatever minister who is in charge of this department should be resigning, also all of the board out. Then we start the review... But no we will take several months to have the review and it will quietly fade from public view with the help of PR spin.

BTW i expect Tubs may be back on the radio in Sept. However RTE will likely offer him a nice package to disappear. it is widely accepted that he did nothing wrong so they cannot sack him and he has a contract i expect. At the end of the day we all get what we deserve...

cdeb

https://www.boards.ie/discussion/comment/120816619#Comment_120816619

Actually, it appears Revenue have thought of that here.

"The tax due on a benefit can be more than your employee's pay. You also might not be able to deduct the full amount of tax in one pay period.

In this case, you must pay the full tax deductible for this period to the Collector-General. This amount will be reflected in your monthly statement.

You should arrange for your employee to repay the difference to you.

If your employee does not repay the tax to you, you should treat the outstanding amount as a benefit."

I told ya

Case 4 Schedule D might cover this. A distant memory of how it works.

MM had an obligation to disclose the use of the car, calculate the benefit and include it in his Form 11.

Hiding behind not being an employee of the car supplier won't be accepted by Revenue. Interest and penalties will be the killer.

Trigger Happy

Would Renault have had any obligation to declare this 'ad hoc loan arrangement' to the taxman as they are essentially paying someone, via use of car, for services rendered?

I wonder what other ad-hoc arrangements will come to light in the coming weeks.

Furze99

Renault Ireland were for sure paying for the car or cars as a distributor. And writing the cost of these off against sales to garages etc.

They seem to hand this car or cars then to Marty and had no direct payment from him but instead services rendered.

Just another twist on the 'Barter' arrangement which stinks of tax avoidance.

Henry Ford III

It's a non cash benefit in lieu of pay. Of course it's taxable.

magicbastarder

his statement said "As I hadn’t sought a fee, Renault offered me the use of a car. I accepted this offer."

this is clearly a statement that he took the car because he wasn't being paid. taking a car is being paid.

GerardKeating

https://www.boards.ie/discussion/comment/120816619#Comment_120816619

They were paying him. the "payment" was the use of the car.

Not sure what card he had, but daily card hire starts at €50+ a day, so a "free car hire" is €7,500+ "income" per year.

cdeb

https://www.boards.ie/discussion/comment/120817006#Comment_120817006

I think the point was more that there was no cash salary from which to deduct BIK. If you have a payslip with just BIK, you'll end up with a negative nett amount - hence "no money to take any tax from".

But it seems Revenue have a rule in place for that, as per the link I posted.

The value of a car as BIK would be based on its open market value, not any sort of comparison with hire car costs.

Henry Ford III

https://www.boards.ie/discussion/comment/120817119#Comment_120817119

Liability is one thing. How it gets collected is another.

I have no doubt there's a tax liability.

cdeb

Well that's where my link in post #13 probably comes in.

It looks like it's possible Renault could have to gross up the charge, which would have Renault (not Marty) on the hook for twice as much tax. I think there's a similar policy in place if a company makes a nett pay to an employee without deducting tax (for whatever daft reason) - the onus is on the employer to gross it up instead.

magicbastarder

https://www.boards.ie/discussion/comment/120817119#Comment_120817119

would it not come under gift tax possibly? i mean, you can't simply get around tax rules by paying someone in something other than cash.

cdeb

Can companies give a gift to individuals though? I would have thought any payment from company to individual would come under payroll tbh. (Even the Small Gift Exemption is technically payroll, in that it's exempted from payroll taxes specifically)

But maybe it's another angle for Revenue to go with if required.

downtheroad

I'd have thought CAT applies, with the first €3,000 of value being under the Small Gift Exemption?

However Marty should have charged a fee for his appearance, so the car value could be seen as income. Sch D Case IV as mentioned above would cover this instance.

No VAT invoice supplied by Marty to Renault. I'm fairly certain I remember seeing something in VATCA about barter transactions needing to be accounted for VAT purposes.

How soon will Revenue send a compliance intervention to Marty I wonder?

ahnowbrowncow

I wonder if Renault were paying VAT on the provision of this vehicle, as would be required. I'm presuming they were providing a new vehicle each year and Marty wasn't driving around in a 2017 Renault Clio.

https://www.boards.ie/discussion/comment/120816619#Comment_120816619

It doesn’t state he wasn’t paid , it was stated payment wasn’t sought

TheChizler

What do high level GAA, rugby players, and "influencers" do in similar situations? This is a long established custom, there must be a procedure.

2 Wheels Good

Is this in any way similar to GAA (and now some other sports) stars getting free cars from brands/garages for the year (or holidays back home)?

https://www.boards.ie/discussion/comment/120816619#Comment_120816619

He was doing work, for them, and got a car.

How is this barter system not classed a payment?

cdeb

https://www.boards.ie/discussion/comment/120817360#Comment_120817360

I think it's been mentioned two or three times now that the likely point of that post was that to add BIK to an otherwise nil payslip would result in a negative nett pay - hence the comment that there was no money to take any tax from.