Hot breakfast for tax officials

The Revenue Commissioners sent two officials last week to give a breakfast briefing to the Irish Society of Insolvency Practitioners. Now, your average gathering of tax officials, lawyers and accountants wouldn’t necessarily be full of vim and vigour. This one had an edge to it.

They gathered at the Dublin offices of Chartered Accountants Ireland last Thursday. Revenue gave a presentation covering the proverbial taxman’s policies on a range of issues regarding bust companies, such as insolvency fees and debt write-offs.

Revenue has raised the ire of practitioners recently over its regular nit-picking on insolvency fees. For example, it queried the fees this week for the Best Menswear examinership, which got court approval on Wednesday.

The court refused Revenue’s request, which it was warned by the company’s lawyers could “delay” Best’s exit from examinership.

One well-known insolvency lawyer told the Revenue officials at the breakfast briefing that it should basically butt out of the fees issue.

According to several of those present, the officials also discussed Revenue’s reluctance to accept any write-offs of tax owed under schemes of arrangement, which require a settlement agreement among 75 per cent of creditors.

The taxman also usually votes against formal examinership rescues where it is expected to take a hit, although it has less scope to block these structures.

Some at the briefing wondered if Revenue’s policy makes much sense, given that such schemes and restructurings are designed to save businesses, and consequently, jobs.

Revenue said court-approved schemes of arrangement are still relatively rare, although reforms last year to cut court costs could make them more popular.

It apparently remains Revenue’s position to vote against them if it is not paid off in full, however.

Other creditors must swallow losses to save businesses. Why not the taxman, if jobs are at stake?