Debt Warehousing Scheme – Revenue to write to taxpayers

Over the coming weeks, Revenue will write to taxpayers currently in the Debt Warehousing Scheme. Revenue confirmed that the letters will quantify the tax liabilities which have been warehoused and set out whether the business is in the COVID-19 restricted trading period, i.e., Period 1, or the zero-interest period, i.e., Period 2. The letters will also list any outstanding returns, which must be filed to benefit from the scheme. We will circulate copes of the letters via Tax News once they are made available to us.

CCAB-I made representations to Revenue about the difficulties agents and taxpayers have been experiencing in establishing what debts are warehoused and to what period(s) the debt(s) relate. Revenue acknowledged the difficulties raised and will consider this while drafting its correspondence.

Period 1 ended on 31 December 2021 for the majority of businesses in the Debt Warehousing Scheme. Period 2 began on 1 January 2022 and will end on 31 December 2022.  Certain businesses can avail of an extension to Period 1 until 30 April 2022. Period 2 for these businesses will begin on 1 May 2022 and end on 30 April 2023.

Businesses must engage with Revenue before Period 2 ends to outline their plans to pay the warehoused debt. Interest at a rate of 3 percent will apply to debt during Period 3 until the debt is paid off.  

A key message coming from Revenue is that blanket write-offs of warehoused debt will not be considered although Revenue did say that they would take a flexible and pragmatic approach to payment arrangements to enable businesses to pay the debt due.

For businesses who currently wish to make payments in relation to warehoused debts, Revenue advised that they can make such payments via ‘RevPay’. Revenue is in the process of enhancing the Phased Payment Arrangement (PPA) facility to enable a structured arrangement for the payment of warehoused debts. This facility should be available in May and will allow warehoused and non-warehoused debt to be included in a single PPA.  

Read Revenue’s Information Booklet.