The Government decision to allow companies warehouse – or long-finger – payment of taxes “facilitated cash flow at a time of great need and was exceptionally successful”, Mr Gargan, a partner at Niall Byrne & Co, said.At its peak, €3.1 billion of such debt was availing of the scheme which, following an extension, runs out at the start of May next year. Of that, €2.25 billion remains outstanding, a figure Mr Gargan said was “worryingly high”, with “the majority of it coming from SMEs”.
“According to figures revealed by the Minister for Finance, small and medium enterprises account for 2,003 of 2,257 [entities] that still have warehoused debt,” he said. He said many of the businesses involved were viable but could not generate enough additional turnover to account for what was lost during the pandemic.
“We owe it to those businesses to protect them and, seeing as there is still €2.25 billion warehoused, it is in our economic best interest to facilitate businesses pay back debt at slower rates,” Mr Gargan said.He called for a review of the Small Companies Administrative Rescue Process to see why so few of the businesses it was designed to help have used it as Minister for Finance Michael McGrath also disclosed that 510 companies eligible for debt warehousing had been liquidated.
Isme last week said that some businesses would require “further forbearance” and potential “write-down” of their debts due to “permanent scarring” from lockdown periods during the emergency phase of the Covid-19 pandemic. On a separate issue, the CPA Ireland boss is calling for revision of the “outdated” Leaving Cert accounting syllabus that he says is putting people off a career in accounting. “It is closer to a history lesson than a depiction of 21st-century accounting,” he said.