JOHN FITZGERALD

Tax Partner McInerney Saunders

‘Revenue interventions have increased recently’

TAX ISSUES Many clients are worried about the impact that rising interest rates, the war in Ukraine and inflation will have on their businesses, and the knock-on effect that this could have in meeting tax debts as they fall due. Tax compliance is a necessary part of doing business and I have noticed an increased level of Revenue interventions recently, which can be very disruptive and stressful for clients.

The tax landscape is ever-changing and for smaller businesses without a dedicated finance function it can be challenging trying to keep up with changing VAT rates, additional reporting obligations and various deadlines to be met for different taxes. This is why it is important to have a good tax adviser to assist in reducing the tax compliance burden where possible.

TAX DEBT Recent reports estimate that there is currently €2.8bn in warehoused debt and Revenue will be writing to businesses looking for their repayment plans. Revenue has also indicated that they will take a ‘flexible and pragmatic’ approach to debt repayments based on the financial circumstances of each business. For companies that are unable to meet their tax debt obligations, the introduction of the Small Company Administrative Rescue Process may help deal with Revenue debt. Sole traders and partnerships wwthat are unable to repay accumulated tax debts may be able to avail of a Personal Insolvency Arrangement or a Debt Settlement Arrangement.

EXIT RELIEFS Entrepreneur Relief and Retirement Relief are very valuable in the context of personal tax planning, and it’s never too early to start planning for retirement or exiting a business. I sometimes get funny looks when dealing with owners of start-up companies because I regularly ask them if they have thought about their exit from the business.

There are a lot of things to consider for business owners and starting early gives time to plan. On the commercial side:

Is the business saleable and who would buy it if it is?

If it is a family business, is there scope to pass it on to the next generation?

Is it possible for the business to be retained and continue to derive income from it by way of dividends or salary?

If the business can be sold, is there any way to maximise the value of the business?

Is the business structured correctly, does it have the right management in place? From the tax perspective:

Is it possible to avail of Entrepreneur Relief or Retirement Relief?

Are there any changes that could be considered in order to qualify for CGT relief?

If the business is being taken over by the next generation, can they avail of CAT Business Property Relief?