Difficulties paying tax?

Failure to meet your tax filing and payment obligations can have significant negative consequences for your business.  Revenue has several enforcement measures at its disposal: the courts process; engaging the Sheriff to collect the taxes due; notices of attachment.  A judgement against your business could affect your credit rating; the Sheriff has powers to seize assets; a notice of attachment means your customers pay directly to the Revenue, not you.

It is important to note that while your tax advisor received copies of all Revenue correspondence to you, he/she does not receive a copy of final seven day demand notices, correspondence from the Sheriff or Revenue Solicitor.

So what do you do if you can’t pay your taxes when the fall due?

1. ACT EARLY

It is important to engage with Revenue as early as possible.  Don’t wait until you’ve missed the due date.  Consult with your accountant or tax advisor.  They will know the best way to approach the Revenue.

2. MAKE A PROPOSAL

If you believe that your cash-flow crisis is temporary and that business will improve, you should aim to enter into an instalment agreement with Revenue.  You must prepare a credible, realistic, achievable plan.  You must be able to meet the commitments you make to Revenue in the plan.

3. MEET YOUR COMMITMENTS

Make sure you adhere to the instalment plan.  If you default you may not get a second chance.  It is important for all businesses (regardless) of size to prepare regular cash-flow forecasts.  This should help you identify any possible future cash-flow crisis early and enable you to act to reduce its impact.

If you forecast that you will default on your instalment plan, again it is vital that you ACT EARLY.  Take the initiative and communicate with Revenue.  This should maximise your chance of agreement with Revenue.

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