ISME has welcomed the announcement by the Revenue of the 12-month extension to the Debt Warehousing Scheme, while expressing surprise that this should be an administrative decision by them rather than a decision by Government.
Neil McDonnell, CEO of ISME said: “It is clear that a great many businesses are financially challenged this winter by the confluence of the energy price crisis, general inflation costs, increasing labour costs, and the imminent collection of Revenue debt. Recent reports suggested that the Revenue would call in the Sheriffs to collect this debt early in the New Year.
Almost two years of restricted trade, and in some cases full business closure, have meant that some businesses will never recover from the effects of the Covid pandemic through normal trading alone. They have accumulated debts while suffering a total absence of sales and will never recoup the sales lost during the extended business closure. While vulnerable, these businesses remain viable once there is a realistic and objective assessment of their future trading prospects.
Therefore, while welcoming this moratorium on the collection of Revenue debts, ISME warns that even with a return to normal post-pandemic, and hopefully post Ukraine war trade, will not resolve the permanent scarring resulting from State-imposed lockdowns. Thousands of viable businesses will require restructuring when the economy returns to normal, and they will avail of the new SCARP process. The Revenue will have to recognise that it will have to fall in line with other creditors and accept that it cannot extract blood from a stone. A more realistic approach is required.”