Revenue issued a news update last week confirming its continued commitment to the Small Company Administrative Rescue Process (SCARP). In the update, Revenue outlined its role and responsibilities in the process and emphasized that its primary objective is to work constructively with financially distressed companies, while ensuring that public interest safeguards remain in place.
Restructuring under SCARP can facilitate certain businesses which may be facing difficulties in repaying their debt obligations and were once viable to help them restart trading, thereby saving the business and jobs. Revenue outlines in the news item that for directors acting in good faith, SCARP remains a valuable and supported option to restructure a viable business.
Under the Companies Act 2021, Revenue has a structured opt‑out right which is considered a legal safeguard to ensure the integrity of the SCARP process is not misused to evade tax liabilities. Since SCARP was introduced in December 2021, Revenue confirmed that there have been 99 applications for SCARP during which Revenue has exercised the opt-out in 19 cases.
Revenue confirmed that it will only exercise its opt-out right under clearly defined circumstances as follows:
- Where Revenue cannot quantify the debt due as a result of outstanding returns or other relevant information, an ongoing audit or intervention, or an active tax appeal, or
- Where the company or directors has a track record of non or poor compliance.
A dedicated SCARP team has been established by Revenue to streamline communications and support viable outcomes.
LOADING...