Record number of firms seek payment deadline extension

A RECORD number of companies have been seeking deadline extensions and deferrals to paying their taxes in the face of deteriorating economic conditions.

The chairman of the Revenue Commissioners, Josephine Feehily, said there was a significant increase in the number of businesses looking to pay taxes by instalment in the past year.

Ms Feehily said tax officials had to make difficult decisions on such requests as it was vital to maintain equitable treatment of all taxpayers. “It’s a very fine balance as we are not bankers,” she told the Dáil Public Accounts Committee.

Ms Feehily said most companies which approached the Revenue were facing liquidity problems. Any decision to allow firms pay taxes by instalment was based on the underlying viability of the business.

The Revenue chairman said there was little tax officials could do, with some companies in difficulty which had a large number of employees but to try and ensure that there was an orderly winding-up of the business.

“It’s a very fine decision when to make that call,” she said, adding: “We don’t want to be the last people to be paid.” However, she stressed that Revenue never pursued any individual to obtain their family home for having unpaid taxes.

Ms Feehily said three companies found to have underpaid tax due in 2007 had subsequently gone into liquidation.

Last night, the Institute of Chartered Accountants in Ireland warned a decline in tax compliance levels was a likely consequence of Ireland’s economic problems.

The institute’s director of taxation Brian Keegan called on Revenue to allow firms in difficulty to pay tax by instalment in order to sustain good compliance rates.

However, Mr Keegan dismissed any suggestion that non-compliance rates in Ireland were high. He claimed the outcome of Revenue’s random audit programme suggested the amounts involved in underpaid tax were due to mistakes rather than there being evidence of widespread under-declaration.