COVID-19: additional measures to support businesses and Debt Warehousing Scheme

May 11, 2020

Revenue has published more details on the new scheme to ‘warehouse’ VAT and PAYE debts associated with the COVID-19 crisis which we reported last week.  Also, the interest suspension for May and June employer PAYE liabilities and May/June VAT liabilities, is confirmed by Revenue.  This is in addition to the interest suspension on late payments for January/February and March/April VAT as well as February, March and April employer PAYE liabilities. These interest suspension measures are in place to support both SMEs (automatically) and other taxpayers (on request) experiencing cashflow and trading difficulties arising from the impacts of COVID-19.  It is important that the associated tax returns continue to be filed with Revenue on time even where payment or part payment is not immediately possible. 

Debt Warehousing Scheme

As we reported last week, Revenue will warehouse deferred tax debts associated with the COVID-19 crisis on an administrative basis pending enactment of the necessary legislation.  It is important to note that to avail of the scheme, the tax debt will have to be quantified through the filing of all relevant returns for the restricted trading phase. If a best estimate return of liability has been made for any period, the correct return will have to be filed to ensure the debt benefits from the warehousing.

Revenue has confirmed that tax clearance status will not be impacted where a taxpayer avails of the debt warehousing.  Refunds and repayments are expected to be paid in the normal manner, notwithstanding that the taxpayer has outstanding VAT and PAYE employer liabilities. 

Further information on the New “warehousing” of deferred tax debts and interest suspension arrangements is available on the Revenue website. 

Interest suspension

You are reminded that businesses other than SMEs who are experiencing temporary cash flow or trading difficulties, should contact the Collector-General’s office through MyEnquiries for any interest suspension.  Generally, SMEs are those taxpayers managed by Revenue’s Business Division and with a turnover of less than €3 million.  Other taxpayers dealt with by Large Corporates Division (LCD) or Medium Enterprise Division (MED), should contact the Collector-General as the interest suspension does not automatically apply in these cases. 

We understand that a short form, known as a COVID-19a form has been designed specifically for LCD and MED taxpayers seeking tax payment deferral and not for the SMEs. LCD and MED taxpayers may be required to complete this form by Revenue. Revenue has told us that this form is to assist Revenue’s internal decision-making process, for example, ensuring all returns are submitted and that there is a commitment to continue to file by the due date.

More information on the interest suspension is available from the Revenue website.