I am advised by Revenue that its primary objective is to ensure that all taxpayers and businesses meet their tax obligations in a timely fashion and pay their liabilities as they fall due. This approach ensures that the Exchequer is funded to meet the needs of citizens and a ‘level playing field’ is maintained for the majority of taxpayers and businesses who are timely tax compliant.
Revenue also accepts that taxpayers or businesses can sometimes experience temporary cashflow difficulties that impact on their ability to meet tax obligations on a timely basis. In such circumstances, Revenue’s clear preference is to work with the taxpayer to agree a mutually acceptable payment solution in preference to deploying debt collection/enforcement sanctions. For example, in 2018, more than 9,000 businesses were granted a phased payment arrangement involving an overall liability of €83 million rather than using debt collection options. Any such arrangement will include a statutory interest component, which Revenue is obliged to apply.
In general, cases are only referred for debt collection/enforcement action where a taxpayer or business fails to engage on the matter and offers no satisfactory proposals towards addressing the outstanding liability. In each case, prior to any debt collection/enforcement action taking place, the taxpayer or business receives at least two notifications from Revenue seeking payment and setting out the consequences of continued non-compliance. These notifications include specified timelines (normally 7 days for each notification) to make payment or to engage with Revenue on the matter.
Revenue has assured me that it will not deploy debt collection/enforcement action where a taxpayer or business fully engages in identifying a mutually acceptable solution. For this reason, it is very important that the taxpayer or business makes early contact with Revenue and does not ignore any notifications or demands for payment.