Martin Byrne had challenged an amended income tax assessment of just over €400,000 issued by Revenue for the period 2010-2014, while his son Kevin appealed a similar demand for over €93,000.

Both men sought to have their Single Farm Payments declared as income for their company — making it liable to much lower corporation tax. They argued that they got the Single Farm Payments in a fiduciary capacity as they did not have an entitlement to the payments under EU rules.

They also claimed Revenue was not within the statutory four-year time period allowed to amend their income tax assessments and include an extra €79,000 for the 2010 tax year.

However, Revenue claimed Mr Byrne and his son were liable for income tax on the Single Farm Payments. Tax officials said the two farmers needed to have registered the entitlements to the Single Farm Payments in the name of the company if they had wanted the payments to be considered its income.

Revenue said it had also amended its corporation tax assessments of the company to reflect its view that the Single Farm Payments were taxable as income for the two men.

In evidence, Kevin Byrne said they had continued to claim the payments in their own names in order to protect against a cut in entitlements due to convergence measures under consideration by the EU. Mr Byrne estimated that he and his father could have lost around €100,000 if their entitlements had been formally transferred to the company.

In its ruling, the Tax Appeals Commission, which did not name the farmers, said the company would have been entitled to be registered by the Department of Agriculture as the recipient of Single Farm Payment as it had a lease on the lands from September 2009.

Commissioner Mark O’Mahony said neither the company nor the Byrnes had taken any steps to carry out such a registration in what Kevin Byrne accepted was a deliberate decision to avoid a reduction in their Single Farm Payments.

While Mr O’Mahony said he understood the rationale for their decision, it meant the company was never registered to receive the payments. “The entitlement to receive Single Farm Payments was at all material times registered in the name of the appellants,” he said.

However, the TAC said Mr Byrne and his son were not entitled to receive payments obtained as a result of “knowingly submitting incorrect information to the department” and so had been correctly assessed for income tax.

And as their tax returns for 2010 did not disclose all material facts, Mr O’Mahony said Revenue was entitled to amend their tax assessments for that year outside the four-year time limit.