Revenue reiterates full support for SCARP
Revenue clarifies its role and responsibilities within the Small Company Administrative Rescue Process (SCARP) and reaffirms its commitment to being a constructive participant.
Revenue’s core objective is to work constructively with financially distressed companies and their Process Advisers, while maintaining safeguards that protect the public interest. The legislation provides Revenue with a structured opt‑out right (“excludable debt” under Section 558L (4) of the Companies Act, 2021).
This opt‑out is designed not as a veto, but a legal safeguard designed to ensure that the integrity of the SCARP process is not misused to evade tax liabilities. Since SCARP was introduced in December 2021, the vast majority of companies have met the inclusion criteria. There have been 99 applications for SCARP of which Revenue has exercised the opt-out in just 19 cases.
When does Revenue exercise the opt-out?
Revenue will only exercise its opt-out right under clearly defined circumstances:
- Where Revenue cannot quantify the debt because of outstanding returns or other relevant information, there is an ongoing audit or intervention, or there is an active tax appeal
- Where the company or directors have a track record of non or poor compliance.
Limited liability is an important right which facilitates business and provides protection for business owners. Revenue recognises that businesses can run into trading difficulties and has a strong record of engaging with businesses who have difficulty meeting their current or historic debt. Revenue will work with businesses to meet their liabilities through Phased Payment Arrangements provided they engage early, submit accurate returns and pay current taxes as they fall due.
Revenue recognises that, in some circumstances, previously viable companies will not be able to meet all their debt and, through restructuring under SCARP, the underlying viable businesses can be rescued and can restart trading, saving the business and the jobs.
While limited liability is a legal right, directors also have a responsibility not to misuse it. Revenue only exercises its right to opt-out of the SCARP process in cases where there are strong and legitimate grounds to do so. Recent commentary has suggested that Revenue’s ability to opt-out of SCARP may deter directors from entering the process. However, the only reason why a director of a company might be discouraged by the potential for Revenue to opt-out is if they anticipate legitimate concerns being raised. For directors acting in good faith and seeking to restructure a viable business, SCARP remains a valuable and supported option.
To support SCARP, Revenue has established a dedicated team to streamline communications and support viable outcomes. Case by case assessments allow Revenue to propose phased payment options or write‑downs, balancing fiscal responsibility with rescue viability. Revenue's approach ensures that SCARP remains both enabling and responsible, ensuring that the integrity of the tax system is upheld.
Comment from Revenue
Revenue remains a committed participant in the SCARP process, working to uphold both its spirit and its safeguards. Our opt‑out right is reserved strictly for cases involving non‑compliance, audits, or ongoing tax appeals. Businesses that act early, engage openly, and address compliance issues will continue to find Revenue a willing and constructive partner in achieving a successful rescue.
[Ends 11/07/2025]