Revenue Commissioners on Target?

Target Express

Parked up for good ?

It is absolutely terrible to hear that Target Express in operation since 1988 who employ 390 people between Ireland and Northern Ireland have ceased trading due to an attachment order by the Revenue on it’s bank accounts. Target Express are clearly a big operation operating 12 depots and distributing for companies such as L’Oreal, Smyths Toys and AWear.

In 2011 they won the Haulier of the Year Award and they opened a new depot in Monaghan – well done guys, we loved that positive, drive forward mentality (have a peep at their Facebook page entry).

On Target for better days!

For those who are not sure what this means, basically the Revenue have taken over the bank accounts of the company. According to reports there were delays with payments to the Revenue (as is the case with so many businesses) and clearly they got fed up of waiting, used their ultimate power and crashed in.

390 people did not get paid last Friday as a result according to reports. I’m just picturing drivers going home to their families petrified about the future and trying to solve the dilemma of shopping for groceries at the weekend.

The pieces I have read on the papers suggest that negotiations were ongoing with the Revenue but ultimately someone there made a call to say “enough is enough” and they have effectively shut the business and helped to put nearly 400 people on the dole queues.

Maybe the company gave the Revenue the two fingers for two long and were not playing ball, maybe the revenue were unreasonable and abused their power, ignoring the tough and very real circumstances this company (fuel prices have gone through the roof as well) found themselves in – this recession ain’t pretty!

Without knowing any of the detail there is a good chance that Target Express (who are definitely finding cash flow really tight) could not look to the bank for extra funding and the only real wiggle room was to delay payments to suppliers and yes, squeeze some extra credit from the Revenue. Would you do this instead of paying your people on a Friday?

The Revenue will argue that they are not a bank and should not be funding a business with their Vat and PAYE/PRSI. Viewed in one light they are right – however in the grand scheme of things they are possibly very wrong. I would prefer to see those arrears being paid over a reasonable time and 390 people still working.

The Revenue must not have the power to take such action without recourse to some “Job Protection” authority (run by business people please) who can access the situation and put something reasonable in place that will protect valid jobs where possible and feasible.

Surely if we believe our Government’s stated objective, creation and protection of jobs is the biggest objective that there is right now in Ireland – everyone’s objective must be aligned to this, including the Revenue Commissioners.

When it comes to “Power” the Revenue just have too much and I don’t trust that it is being used properly – the “Target” must be jobs and Power needs to be with those who can generate and protect jobs, not take them away.

Greg Canty is a partner of Fuzion

 

Fuzion are a Marketing and PR Firm with offices in Cork and Dublin

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35 Responses to “Revenue Commissioners on Target?”

  1. Alan Carroll Says:

    Totally agree Greg, shame they have gone to the wall..

  2. Elke Says:

    Greg, I totally agree – without knowing the facts – the Revenue should work out a payment plan for the company that is suitable enough. Closing the company is very short-sighted as the money being brought in from the accounts to pay off the tax debts is nothing compared to the benefits being paid out to the people having lost their jobs. Very short-sighted indeed.

  3. Liam Garvey Says:

    It appears the problem was with a payment due of 125K – the company paid a million in the last couple of weeks.

    Looking from the outside it would seem that in situations like this that a Plan A/Plan B approach should be taken.

    Plan A – how much will it cost the State if the present balance is not paid?

    Plan B – how much will it cost the State if the company closes and we have to pay Social Welfare, we lose the paye/prsi income from the workers, we lose the VAT from their trading and most of all – how much will the State have to contribute to Statutory Redundancy payments?

  4. John Says:

    Greg I think some caution is required here before the Revune is targeted ? I couldn’t veryify if as Liam suggested TE paid €1M within the last week? If Liam is correct then it beggars belief that some form of payment plan couldn’t have been determined as Elke suggested. However the mere fact that they had been retaining €1,125,000 suggests a deeper problem. The excise duty charged on fuel probably didn’t help and has climbed in disproportion to the cost of living! I am very sure however with the relative size of this business and their available contracts that the receivers will swiftly be moved in. My concern would be that the business is either bought by a non-Irish interest and the profits (if there were any) leave the country or, the company is asset stripped so that RC get the money they are owed.

    • Greg Canty Says:

      thanks for the feedback John & Trich – lets hope we hear the story. I do feel strongly that the Revenue should not have power that can turf 390 people out of work – they are a government body and a big eye should be kept on jobs all of the time. I hope we get to hear their side of the story – we deserve to hear it and it should be heard.

  5. irishminx Says:

    http://theirishbull.com/2012/08/28/revenue-blamed-for-loss-of-nearly-400-jobs/

    Well said Greg, keep saying it!

    🙂

  6. Michael Power Says:

    Well, that’s great. So, if we can show that we employ people, we don’t have to pay taxes. Grow up, everyone. You have to pay tax. You can’t just give two fingers to Revenue just because you employ people. we don’t know the full background, and we probably never will, because Revenue never discuss specific cases in public and just as well. It does seem there were underlying problems with the business.

    • Greg Canty Says:

      thanks for the feedback Michael. Your point is valid but good companies should never be left go underground, even if they are experiencing a bad time currently – one bad debt could wipe you out, I’d hope that we have the capacity to look at the circumstances instead of shooting bullets.

      My question is should the Revenue have the power to do what they did and affect so many workers without any obvious recourse to anyone? I know from the experience with one of our clients that exactly the same happened, when they were playing ball. Lets see how it plays out – the scale is too big for it to be swept under the carpet.

  7. ian_kenefick (@ian_kenefick) Says:

    It’s terrible news for all the staff, particularly at such an expensive time of the year (back to school). I was listening to some of the lads on a local radio station here in Cork who are staging a sit in and you could hear the despair in their voices. No wages for 2 weeks – left high and dry some of them up sh1t creek without a paddle.

    This will cost the state more in the long run than the meager €200 and odd k this company owes. Revenue must be collected, but at the same time jobs must be protected. There surely must be a smarter way of doing this… this is stupid.

    I guess revenue has to play hard ball or they would be taken to ransom by companies…

    • Greg Canty Says:

      Great post Ian – reasonableness must be the order of the day. It’s a huge pity we don’t hear the Revenue side of the story. There was a great post by a company who hit hard times and Target Express were patient and worked with them a number of years back. Jobs must be a priority now (without the revenue being held to ransom)

  8. Hatchetman Says:

    Target already hadn’t paid their staff one week’s wages BEFORE Revenue moved in. Obviously not a viable Company. Get your facts right!

    • Greg Canty Says:

      Hi Paul – thanks for your input. The question was about the Revenue powers. Do you not worry about jobs? Did you not see they have repaid a huge amount to the revenue already? I hope in your world you don’t have to juggle survival versus revenue payments.

  9. TheMarketingShop.ie (@marketingdebbie) Says:

    Well said Greg, seems Irish gov departments just don’t do joined up thinking. All are concerned about balancing their own books so just pass the buck elsewhere – god only knows how many multiples of the shortfall will be paid in benefits in the coming years. Apart from the 390 employees directly employed there are knock-on effects on customers, suppliers, etc in terms of cost, possibly even other jobs too.

    Because of a technicality in 2009 I lost a job when another government department prevented the company I worked at in applying for examinership which could have saved 172 jobs. Sadly 3 years later lessons have not been learned and god knows how many others have been through similar. Thankfully though most people I worked with have found an alternative career path but it’s been challenging – particularly when liquidation means statutory redundancy taking in our case 6 months for first payment and 30 months for holiday pay to arrive!

    I also wonder how many other companies who are struggling with cashflow are today reviewing their accounts and wondering if it would be easier to wind the business up now rather than face a similar fate to Target Express?

  10. Gerry Says:

    While I feel for the plight of the management and staff here, I think that something else is a foot that were not being told………..

  11. David Madden Says:

    Liquidations & Receiverships are a tragedy for so many stakeholders – the owners, the company’s suppliers, dare I say its bankers, taxpayers who will ultimately foot the bill and the least powerful of all – its employees. Without knowing all the facts, it appears that this was not as solid a business as has been portrayed. The Liquidator announced just yesterday that the Company had no hope of survival, effectively administering the last rites.
    Can I make one argument in favour of the Revenue’s approach. The haulage sector is an extremely difficult and crowded sector at present with spiralling fuel costs against the backdrop of a domestic economy on its knees. Companies who do not pay their taxes give themselves an unfair cost and cashflow advantage over their competitors. The Revenue in my opinion have done the haulage industry a huge favour this week by helping protect the jobs of the many others in the industry. Those who pay their taxes deserve to be protected and the creation of a more level playing field should be acknowledged.
    Notwithstanding this, my sympathies go out to the employees of Target Express. September can be a challenging month for many families and one can only imagine the stress these employees & their families are suffering right now. They are the real victims!

    • Greg Canty Says:

      Thanks for the comments David – it is definitely a very sad day for the employees. Not knowing anything about Target Express it must be a sad day also for a business that has been there since 1988.

  12. Michael Power Says:

    Greg,
    You keep making comments like “without knowing the full facts”, “without knowing any of the detail”, “not knowing anything about Target Express”, and yet you feel you have sufficient facts to conclude that Revenue have too much power and you don’t believe it is being used wisely. I don’t understand how you can reach that conclusion with so little hard information about the background to this case.

    • Greg Canty Says:

      Michael – I’m just giving my opinion. From my experience I am pro business and anti- revenue. I worry about their objectives and I do fear from experience that they can often squeeze businesses that are hanging in there.

      Some peope are black and white and reckon – if you can’t pay your bills then just shut down. I tend to take the view that current circumstances are unprecedented and we need to do everything to keep places open and hope they recover . I don’t agree with any company taking the mickey – I have seen this as well!!

      Let’s hope we get the full story and that all those workers get jobs soon. It’s a shame.

    • Angela Gowing Says:

      Revenue is Revenue. If they are lenient for one where would it end. I agree with Michael Power on this one.

      • Greg Canty Says:

        Thanks Angela – Are we saying that every situation is the same and we apply all the rules equally? The world doesn’t work that way in my view . You have to examine the circumstances in every scenario -jobs are the biggest priority.

  13. John Leahy Says:

    Greg,
    Afraid I agree with Michael here. You keep saying you don’t know the full facts but that has not stopped you and others from castigating Revenue and assuming they’ve done something wrong. Remember the people in Revenue (no connections and no relations there) are workers too and from what I know of you and your modus operandi you are an ethical and caring employer who acknowledges the contributions of others, even if they are only doing the job they are expected to do but especially when they are doing so in difficult circumstances.

    Maybe if we supported our institutions of our state a bit more instead of trying to undermine them they might be able to do a better job. And while the air was thick all week with people lambasting Revenue, without the facts may I add, I don’t hear too many people now coming out and saying – ‘well maybe I got that wrong and thank you revenue for doing the job you’re suppose to do and not the job the JoeDuffyites want you to do’
    John
    P.S. I still think you’re one of the good guys

    • Greg Canty Says:

      Thanks for the feedback John – I haven’t castigated Revrnue , I have questioned their powers in a scenario where so many jobs are on the line.

      Let’s look at things another way … How about doing an attachment on the coffers of the country and putting all of the public service at risk because …. It’s just not sustainable!!

      That would put the cat amongst the pigeons …we could trot out all the revenue statements. Let’s face it – Croke apart etc, how much time have they had to reduce costs and achieve real savings ?

      There ya go – apply the same logic of Target to our countries finances …if the shoe fits

      • John Leahy Says:

        btw I don’t know about your scenario regarding an attachment order to the coffers of the country because (a) we can’t seek the order against ourselves (b) there’s no money to attach to anyway only debt and (c) even if you could do it you’re too late, the IMF/EMF/OMD/ELO/AC/DC got there before you, poor sods

  14. Patrick O'Hare Says:

    The question Greg asked was whether Revenue should have the power to make attachment orders against businesses.

    My experience of Revenue (as a practicing accountant with hundreds of corporate clients) is that attachment orders are used as a last resort. We have done deals for clients to pay Revenue up to five years (in one case) and generally over 12/36 months. Our experience is that Revenure are reasonably accomodating. However, the other side of the equation is that tax revenue is required to pay for schools and hospitals (and TD’s salaries of course) and there comes a time in many negotiations when the Revenue has to say enough is enough.

    I understand that the company provided information to the court to say over €600k was outstanding to Revenue rather than the amount stated by the business owner in the media. It’s so easy for a business owner to abrogate responsibility and blame Revenue as they cannot comment on individual cases.

    I have enormous sympathy for the 390 people out of work (one lives across the road from me) and I would be very hopeful that they will find positions with the companies which pick up the slack left by Target. My guess is that the net job loss from this fiasco will be very minimal as the customers of Target still need goods shipped from one place to another.

    Greg, you need to bear in mind that the monies in question (for the most part) were never the property of Target Express. Any VAT outstanding was levied by Target to its customers and is not a cost to Target. The PAYE, Income Levy and employees PRSI outstanding was the property of the employees and was deducted from their salaries. The only tax which was really collectible from Target was employers PRSI which I would imagine was a relatively minimal part of the overall liability.

    I agree that Revenue powers are substantial but my experience is that they use the powers with relative discretion but are not afraid to move where they feel thay are being unfairly disadvantaged.

    My feeling is that we will find this case is very similar to the case of that elderly couple who recently protested against being evicted despite their being very substantial landlords. When the facts finally emerge I doubt anyone will lay the blame at Revenues door.

    Finally, I am amused at the critics of the various government ministers who refused to get involved in the situation. Do we really want a situation where companies which are unable to pay their taxes can lobby a government minister to interfere with the tax collection system? Do we want to be where Greece and Italy are? Is this really what people elect TD’s to do? Is there an expectation that Government ministers will succeed where professional accountants and lawyers cannot?

    I understand the owner of this business is based in the same town as Sean Quinn and perhaps it is something in the water in that Northern Irish town which leads them to believe they are above the same processes which apply to your business and mine.

    • Greg Canty Says:

      Great post Patrick -my question was should they have that power where so many jobs are at stake. Their role is to collect taxes due but there is also an agenda to preserve jobs. I would fear that in scenarios where jobs could be saved wrong actions could be taken.

      • John Leahy Says:

        A ray of hope in all of this .. it appears that government ministers didn’t bow to pressure to interfere. Maybe we are getting somewhere ..

  15. Michele O'Briain Says:

    Great news this evening that Masterlink has offered to buy Target with the hope that the bulk of jobs can be saved if Masterlink can persuade the majority of former Target customers to avail of their services. It seems now that Revenue have got a lot of bad press over the last couple of days as there may have been more financial woes at Target than was being disclosed by the owner initially. You can’t blame him for this though as he was struggling to come to terms with the fact that a business he had built up for many years was in trouble and he genuinely wanted to keep the company open and keep his nearly 400 employees in jobs in these difficult times. I am delighted that there is at least some hope for the families involved this weekend and hope that the owner can rise again from the ashes in a new venture or perhaps work alongside the new owners.

    • Greg Canty Says:

      Let’s hope it works out for everyone. Thanks for update Michele

      • Generic Says:

        I am hopefull that the Masterlink option will work out and save the 390 people who have been used as feckless pawns in this debacle! This was an attempt by a morally corrupt business man (withholding workers wages for two weeks amongst other crimes) to lay the blame at Revenue’s door when clearly they were reacting to a desperate situation. I hope this guy is pursued through the courts and made an example of. Its one law for one here and another law for another (Mick Wallace vs Paul Begley). Still I am heartened by the sensible responses people made during this discussion vs the “listeners” to the sensational media during this week!

      • Greg Canty Says:

        Great post John – Target Express management left themselves down badly last week with their staff

  16. Ken Browne Says:

    There are two sides to every story- revenue should have been paid. Target could have saved jobs by scaling back – you cannot hang on like they did it was irresponsible. However Revenue should have someone proficient they can insert to balance the books – reduce expenditure-in this case reduce the number of depots, put employees on contract or reduced hours(spread a smaller loss of earnings across all employees rather than impact a select minority) then Go back to revenue show them the plan for recovery-show them its possible-give them a guarantee & start paying something immediately. I agree with Greg 100% Target could have been saved.By end of 1/4 2012- target could have been back in profit & full employment restored to some of its employees within that time-frame.The remaining jobs restored by end 1st 1/4 2013.Target may also have been waiting for payment from clients- we have all been there – we need business people in Government.

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