Tax-collecting sheriffs face uncertainty over Covid-19 work pause

Pandemic ‘warehousing’ of tax debt has left country’s 14 sheriffs with depleted incomes

The country’s sheriffs, who recover unpaid taxes for the State, may be forced out of the business due to the suspension of tax enforcement as a result of the Covid-19 pandemic.

Sheriffs have warned that they face suspending or closing their offices because they cannot cover their running costs due to the collapse in Revenue warrants issued to collect unpaid taxes because such debts have been parked.

The Government has suspended the collection of pandemic debt in order to help businesses through the disruption and closures caused by lockdowns and restrictions during the public health crisis.

Sheriffs have expressed concern that the demise of their decades-long enforcement work could have a long-term impact on tax compliance, by removing a deterrent and damaging the tax collection system in general.

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The State’s 14 sheriffs, who are appointed by the Government, finance their own operations as commercial enterprises on a commission based on a percentage of taxes collected for the Revenue.

Pre-pandemic, the Revenue issued more than 72,000 warrants in 2019, collecting €270 million in unpaid taxes for the State. This has dropped by more than 90 per cent since Covid-19 struck, with just a small amount of pre-2020 debt being collected.

With the loss of this revenue stream, which accounts for the bulk of their work, sheriffs face an acute financial crisis next month with the ending of the Government’s Employment Wage Subsidy Scheme that has helped them through the pandemic.

Without this financial support and regular income, sheriffs are understood to be looking at the possibility of having to make staff redundant and “mothballing” their offices until the Revenue can guarantee a flow of work with referrals for tax collection being issued again.

Statutory duties

Sheriffs are concerned that they may be unable to carry out their statutory duties, enforce court orders or provide searches on properties for debts due to the loss of their income.

The Revenue is believed to have told the Sheriffs’ Association, the body which represents them, that normal levels of tax enforcement will not return until 2024 due to the “warehousing” of debt.

The association, which has lobbied senior Government figures and the Revenue about the impact on sheriffs since early in the pandemic, declined to comment when contacted.

The Revenue said it was not in position to comment. A spokeswoman said that it would be publishing an update on the debt warehousing scheme this week.

The Government has parked more than €3.2 billion of tax debt owing by 105,000 businesses, including 3,200 large and mid-sized firms, with the interest-free period running until at least 2023.

Simon Carswell

Simon Carswell

Simon Carswell is The Irish Times’s Public Affairs Editor and former Washington correspondent