Thursday 21 September 2017

Number of firms wound up by the taxman doubles

Shane Phelan Public Affairs Editor

THE number of company liquidations being forced by the taxman has doubled since the start of the economic bust.

Records obtained by the Irish Independent reveal there were 103 liquidations at the behest of the Revenue Commissioners in the past year, compared to just 45 in 2008.

The rise goes against the prevailing trend, with the number of firms declared insolvent last month actually down a third on the same period last year.

The figures, released under the Freedom of Information Act, appear to show that, while liquidations are down, an increasing number of those businesses are diverting their cash to pay suppliers while leaving the taxman on the hook.

Over €10.4m has been paid in fees to liquidators acting on behalf of the Revenue between 2008 and last year.

The best-paid liquidators were large accountancy firms, such as BDO Simpson Xavier, which received fees of €846,000 for 28 liquidations, and PricewaterhouseCoopers, which got €844,000 for 16 liquidations.

However, as well as using the larger firms, the Revenue has spread its business around the country. The third best-paid liquidators since 2008 was Co Roscommon firm Ahern & Co, run by accountant Sinead Devine. It was paid €587,000 to carry out nine liquidations.

MISTAKE

One liquidator who regularly carries out work for the Revenue, Dublin-based PJ Lynch, said an increasing number of firms were making the mistake of not working with the taxman to sort out their affairs.

"They'll always leave the taxman until last and say they were trying to keep the business going," he told the Irish Independent.

"What they should realise is that the Revenue do work with people, and will give people every opportunity.

"They do work with small businesses and they try to do their best. If you engage with your banks and engage with the Revenue early on, they will work with you. But not engaging does cause a problem."

Overall, there were 341 Revenue-led liquidations between 2008 and last year – 45 in 2008, 50 in 2009, 58 in 2010, 85 in 2011 and 103 in 2012.

A spokeswoman for Revenue was unable to say how much money all of these liquidations had realised for the taxman. However, she said moving to liquidate a business was an action of last resort.

"Revenue's overarching strategy in regard to debt collection is to work proactively with taxpayers and businesses experiencing temporary cashflow problems, provided there is early and open engagement, to agree mutually satisfactory arrangements," she said.

Irish Independent

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