Business closure debt warehousing response to Micheál Martin

Business closure debt warehousing response to Micheál Martin

Cork Business Association (CBA) welcomes the recent comments from Tánaiste Micheál Martin expressing a willingness to reevaluate the Debt Warehousing Scheme, particularly in the wake of recent business closures. However, the CBA emphasizes the need for tangible action to support struggling businesses during these challenging times.

CBA Finance Spokesperson and Tax Partner with Quintas, Dave O’Brien, stresses the urgency for an additional 12 months of interest-free deferment in debt repayments, due to commence in May of this year. While acknowledging the government’s reluctance to write off debt, that’s what effectively happens with a liquidation. During examinership the whole debt may not be written off but a large portion would be.

O’Brien further urges the government to entertain informal requests for Revenue debt write-offs, pointing out the potential benefits for both businesses and the government in terms of tax revenues.

Addressing concerns about the impact on company directors CBA calls for a commitment from the government to refrain from pursuing unpaid warehoused PAYE in the event of business liquidation, drawing attention to existing legislation that allows such actions.

Beyond debt warehousing, CBA recognises the broader issues affecting businesses. CBA proposes that the Government engage in urgent discussions with energy providers to alleviate the escalating costs, particularly in the commercial sector, advocating for a reduction that would positively impact overall business expenses. 

In the hospitality sector, CBA calls for a review of the VAT rate for food to provide essential support to businesses facing challenges.

Highlighting the government-backed SBCI loans taken by some businesses during the pandemic, CBA and O’Brien recommend a 12-month repayment delay to prevent financial strain on companies and ensure a more favourable outcome for both banks and the government. Again on a liquidation the cost of this will be borne by the Government.

Commenting on the upcoming Cost of Business grant, the initiative is appreciated but CBA calls for more substantial support, emphasising that the current offering may not suffice for businesses. While welcome, that €5,000 once off grant will be gone by the end of the week in which it is received.

Expressing concerns about potential PRSI and minimum wage increases, CBA urges the government to outline clear plans or assurances, noting the potential impact on the survival of small businesses. Small businesses will not survive with these increases.

In a final plea, CBA and O’Brien emphasise the crucial role of businesses in Cork City’s continued improvement and calls for an urgent meeting with the Minister for Finance to address these pressing issues. The government now need to stand up for the businesses in which we all visit and use on a daily basis. We need these businesses to ensure Cork City can continue to improve. 


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