Revenue to show flexibility in tax arrears for Clearance Certs
The Revenue Commissioners are showing flexibility in their dealings with publicans struggling with debt when it comes to Tax Clearance Certificates at licence renewal time.
Print3 April 2013
In a letter to Fine Gael TD for Mayo Michelle Mulherin, the Chairman of the Revenue Commissioners Josephine Feehily provided assurances that increased flexibility is being shown to businesses which are experiencing difficulty getting their Tax Clearance Certificate.
The Ballina TD had raised the issue in the Dail after becoming aware of several instances of pubs having to close as a result of being unable to borrow money from the banks to pay their tax bill.
According to figures from Revenue, there are some 730 less licences than there were in 2008.
“It is increasingly apparent to me that a large number of viable businesses, including many pubs, are being pushed towards closure because they can’t borrow to pay tax in order to get their tax clearance certificate which they need in order to trade,” she stated recently.
But according to the letter from Josephine Feehily, the Revenue Commissioners would look favourably on a possible reduction of the necessary 40% down-payment for those engaged in paying the Revenue by installment.
It’s hoped that this will enable many publicans to continue their trade legally by possessing a legitimate TCC.
Deputy Mulherin had requested the Minister for Finance to ensure that the Revenue Commissioners take into account the difficulties being faced by licence holders in order to continue trading with a TCC.
The RC Chairperson responded in a letter to the Mayo TD, assuring her that Revenue may reduce the down-payment of 40% in a phased payment situation for Tax Clearance on a case-by-case basis.
The letter stated, “Revenue is conscious of the difficult economic and financial climate that prevails and how this can pose challenges for businesses and individuals in being timely tax compliant. Revenue has responded to the difficult environment by encouraging businesses experiencing particular payment difficulties to work proactively with them, when such difficulties start to arise, in order to find an agreed way through those difficulties and quickly restore voluntary timely compliance. For example in 2012 there were on average 16,000 businesses in phased payment arrangements with Revenue, involving an overall liability of €123 million. However Revenue must always be cognisant of ensuring the correct balance between supporting businesses with a temporary cash flow difficulty and conferring an unfair competitive advantage on non-compliant businesses over those that are tax compliant.
“In regard to the tax clearance issue, certificates automatically issue to individuals or businesses that are tax compliant. In circumstances where there are compliance problems in regard to the timely payment of tax then certificates are automatically suspended.
“In cases where payment of a tax debt in a single lump sum is demonstrably not possible for an individual or business and a tax clearance certificate is required, then the individual or business should contact Revenue and negotiate a mutually acceptable phased payment arrangement.
“A phased payment arrangement is a concession and must be fully justified to Revenue with reference to the specific circumstances of the individual taxpayer or business. In such phased payment situations where tax clearance is required, a down payment of at least 40% of the debt is normally requested.
“However, this level of down payment can be reduced on a case by case basis depending on the particular circumstances of the case and the willingness of the taxpayer or business to engage with Revenue to satisfactorily address the outstanding tax debt and to restore timely compliance as quickly as possible.”
News of such possible individual arrangements being made with publicans was welcomed by VFI Chief Executive Padraig Cribben who stated, “I’d welcome initiatives that make it easier for individual publicans to meet with the requirements to obtain a Tax Clearance Certificate”.
“A phased payment arrangement is a concession and must be fully justified to Revenue with reference to the specific circumstances of the individual taxpayer or business” – Revenue Commissioners Chairman Josephine Feehily.
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