Ahead of the 1 May 2024 deadline, the Minister for Finance Michael McGrath TD is encouraging businesses availing of the Debt Warehousing Scheme (DWS) to engage now with Revenue to agree arrangements to repay their warehoused debt. The Minister has noted Revenue’s flexible approach to working with taxpayers to manage their liabilities over a timeline that suits their particular circumstances on a case-by-case basis.
Revenue has stated that there is no expectation on businesses to have all their warehoused debt paid in full by 1 May. They must, however, have engaged with Revenue by submitting an ePPA online via ROS to address their warehoused debt. Where a business plans to use an approved refund/credit to pay some or all of their debt, they must notify Revenue in advance of 1 May 2024.
Revenue has updated its website to include a video recording to outline the key actions businesses need to take now and the payment options available. In addition, Revenue has also updated the Debt Warehousing Information Booklet to outline some key Frequently Asked Questions (FAQs) in relation to the payment of warehoused debt.
Section 997A TCA 1997 operates to deny directors/employees with a material interest in the company a credit for tax deducted from their remuneration until such tax has been remitted to the Collector-General. The credit for tax deducted cannot exceed the tax actually remitted in respect of that person’s emoluments. Revenue has provided clarification on the approach for section 997A TCA 1997 regarding warehoused debt relating to emoluments paid to directors/employees with a material interest in the company. In such circumstances, both the company and the director/employee will need to enter into a formal phased payment arrangement (PPA) for their warehoused liabilities via ROS. However, the director/employee may request a payment break for the PPA until such time as the company has paid its liability in full. Revenue is aware that some companies may need an extended period of time to pay off the warehoused debt. Revenue Legislation Services (RLS) is currently considering the position. It is not intended that the director/employee will be negatively impacted where the company pays its full Employer PAYE liability (i.e. credit for PAYE paid will be available to the director/employee where the Employer PAYE liability is paid in full, even outside of the usual 4-year time limit).
Revenue will continue with its approach to PPAs so long as the taxpayer continues to file their current tax returns and pay current liabilities as they fall due, and they engage with Revenue in advance of 1 May to agree to agree arrangements to address their liabilities. The Minister last week highlighted that the payment of current taxes, mainly employer’s PAYE, PRSI and VAT, and arrears arising outside the warehouse periods is considered to be a key indicator of a business’s viability.
To assist customers as the debt warehouse deadline approaches, the Collector General’s Division will be extending the opening hours for their phone lines from 9.30 to 16.30 from 24 April to 3 May.
The Minister also noted that at the end of March Revenue wrote to customers providing them with a schedule of their debt and highlighting the immediate action required before 1 May 2024 to address the debt and the flexible payment options available.
Warehoused debt of €1.65 billion remains outstanding in respect of 55,490 individual taxpayers, 70 percent of which owe amounts less than €5,000. The bulk of the debt, €1.41 billion, is owed by 5,040 taxpayers, each owing in excess of €50,000. At 31 March 2024 2,760 taxpayers had agreed PPAs for warehoused debt totalling €237 million.
The Minister also noted Revenue’s approach in refunding taxpayers who have paid interest at 3 percent on warehoused debt and by adjusting the terms of PPAs.
Commenting on the latest statistics, Minister McGrath stated:
“The reducing amount of debt in the warehouse and the associated number of customers involved demonstrates that businesses are working with Revenue to pay the amounts due. However, the liabilities of over 55,000 customers remain in the warehouse. Many of these customers have engaged with Revenue, as is evidenced by the increase in numbers of PPAs in place, however, for those businesses that have not already done so, the key message is that they should engage with Revenue now, in order to agree arrangements to address their debts and avail of the flexibilities being offered in relation to this debt. Taxpayers must have submitted their application for a Phased Payment Arrangement (PPA) using Revenue’s online Service (ROS) by 1 May 2024, where appropriate.
It is important to note that, businesses are not required to pay all of their warehoused debt by 1 May 2024. However, in order to avail of the 0 percent interest and flexible payment options, they are required to engage with Revenue to make arrangements to pay the debt over an agreed period of time, based on their individual circumstances and capacity to pay. A key condition of the scheme is that taxpayers continue to file their current tax returns on time and meet their current tax liabilities as they fall due.
Finally, I welcome the pragmatic and fair approach being taken by Revenue and their efforts in assisting their customers agree a realistic payment plan tailored to their particular circumstances.”
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