Revenue referred nearly 9,000 businesses to the sheriffs for unpaid taxes in January and February as officials resumed standard debt-collection practices after pausing during the pandemic.
Accountants are reporting that the Collector General has become “very aggressive” this year, with a high volume of notices being sent to companies demanding immediate payment of outstanding taxes.
“They send a seven-day notice to pay any outstanding taxes and then immediately after the seventh day seem to refer the debt to the sheriff,” said Jeffrey Case, an Athlone-based accountant and part of the Midlands ACCA Network.
“I appreciate that there are strict rules but it’s gone over the top. I have never had as many sheriffs’ warrants.”
A Revenue spokesperson said that although normal tax enforcement is back in force after a phased return that began in January 2022, the number of referrals is 45pc lower than in the comparable pre-pandemic period of January and February of 2020, when there were 15,600.
The perceived increase in enforcement coincides with the roll-out by Revenue of a debt management system (DMS) that was suspended during the Covid-19 crisis.
The new DMS, which is now fully operational after briefly coming into use in late 2019, can monitor all 1.35 million registered businesses simultaneously. It significantly increases Revenue’s capacity for compliance and enforcement activities, according to Revenue’s annual report.
“For those who fail to respond, we can move swiftly to take the appropriate enforcement action,” the annual report says. “This increase in enforcement activities, including referrals to sheriffs and external solicitors, is anticipated to lead to an increase in successful compliance and collection outcomes.”
The faster tempo on collections also follows the recent extension of the Covid-19 tax debt warehousing scheme by Revenue, which postpones the payment date for businesses to May 2024. However, Revenue is understood to be cracking down swiftly on firms that are not up to date with filing returns and making payments on current liabilities.
Businesses that commit such seemingly minor infractions are getting kicked out of the warehousing scheme, with full taxes and penalty interest due immediately if they don’t engage with Revenue.
“It remains a key condition of the Debt Warehousing Scheme that current liabilities are filed and paid on time,” a Revenue spokesperson said in statement to the Irish Independent.
A business that loses access to the scheme due to a compliance issue could pay penalty interest of more than €5,000 dating back to the beginning of the warehouse period, Revenue said.
At the end of February, there were still 65,000 firms using the tax warehousing scheme, where €2.3bn in deferred taxes is parked. Since January, unpaid balances are accruing interest at a rate of 3pc after being held at 0pc for the duration of the pandemic. Normally, Revenue charges 10pc on outstanding liabilities.
“Self-employed people need to make sure that they do not ignore final demands and seven-day notices from the tax man,” said Mr Case.
