PJ Cunningham, aged 53, is a 100% shareholder/director of Apple Restaurant Limited. PJ has come to you for some advice: Taxation Assignment, UOL, Ireland

PJ Cunningham, aged 53, is a 100% shareholder/director of Apple Restaurant Limited. PJ has come to you for some advice. PF s previous accountant has retired and you have been asked to act as his accountant/ tax advisor going forward. He has requested you carry out a full examination of his financial affairs as he has heard that some of his previous accountants’ clients are now the subject of a Revenue Audit and compliance check.

PJ has been a full-time working director since incorporation ten years ago and the company is trading well. He has high hopes for the restaurant business and post covid-19, sees significant growth in this area. He hopes to set up a chain of restaurants over the next year and is confident that he can make a success of such a venture.

Following your examination of RI’s financial affairs, the following comes to light:

You note that his salary figure included in the accounts for the year 2022 was insufficient to support his lifestyle. He then admitted that on 31° July 2022 he had taken €48,000 in respect of a cash sale, which was not declared. He has assured you that this was the only time that this has happened.
In addition to Apple Restaurant Limited’s six registered employees, there is also one part-time kitchen employee, Tommy, who is not recorded on the payroll. Tommy received E350 in cash per week throughout the year, directly out of the takings, prior to the recording of sales in the books and records. You learn that Tommy is single and took this extra work to help save for a mortgage. He also earned a gross salary of €55,000 in his main employment in 2022.
PJ personally owns an apartment in Cork, which he lets out, and one apartment in Spain which he also lets out. Because the combined income results in a ‘loss’, N has not included any of the income from the rental properties in his tax returns. Pi purchased the apartment in Spain on 1 February 2022 for €300,000. He has advised you that he obtained a mortgage from a Spanish bank for E250,000 and that he funded the balance of the purchase price from personal savings, which had been accumulated over a ten-year period. The interest of E15,000 was paid on the mortgage loan for the period from 1 February to 31 December 2022.

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