In a bid to incentivise lawyers to work on recouping as much tax debt as possible, tender documentation issued by Revenue states that “it is intended that a major portion of the remuneration of the appointed solicitor firms will be in the form of commission expressed as a percentage of amounts collected”.
The tender reveals that Revenue is continuing to ramp up its efforts to recover tax debts in the courts, following the closure of the warehouse scheme last summer. Last year the yield from solicitor enforcement was €38.7m, which was a 43pc increase on the yield of €27.05m in 2023.
As part of the remuneration structure in the planned multi-supplier framework for the provision of the legal services, Revenue says it is conscious that there may be some cases where costs have been incurred but where recovery of the debt did not prove possible.
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The tender shows that in the issuing of court proceedings against a tax debtor, a commission to legal firms of 4pc of the first €4,000 and 2pc of the balance of tax and interest collected will be applicable in a successful case.
For complex work where input to cases at senior/partner level is necessary, Revenue has stated that firms can charge €300 plus Vat per hour and for “out-of-scope” work outside the standard debt enforcement/proceedings not requiring input from senior/partner level, firms can charge €200 plus Vat per hour.
The number of referrals by Revenue to legal firms for the collection of outstanding tax debt totalled 7,360 in 2024, a 35pc increase on the 5,439 referrals in 2023.
The aggregate value of the referrals last year totalled €163.63m and produced a yield of €38.7m compared with €143.44m of referrals in 2023 which produced a yield of €27m.
The tender states that “although collection activity can yield a reward several years after commencement, the great bulk of yield is obtained within six months of referral”. Revenue says it intends to effectively utilise the full range of enforcement options to reach a conclusion in every case.
It says: “The desired conclusion is the recovery of the debt due and the establishment of a pattern of full compliance.”
The work involves debt collection proceedings at all court levels up to and including the Supreme Court.
The closing date for legal firms to submit tenders is October 1.
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