Last week, Revenue wrote to the Minister for Finance, Paschal Donohoe providing an update on the Debt Warehousing Scheme. The statistics published by Revenue show that, as at the end of January 2022, approximately 105,000 businesses were availing of the Debt Warehousing Scheme representing more than €3 billion in tax debts.
Of the 250,000 businesses eligible for the Debt Warehousing Scheme since its inception:
- 59 percent paid all their taxes in the month it was due, or having availed of the scheme, have since paid their taxes in full
- 36 percent have part paid their warehoused debt and are continuing to avail of the scheme representing approximately €2.7 billion of debt
- 5 percent (circa 12,000 businesses) continue to avail of the scheme in respect of all their COVID-19 related debts representing €300 million of debt.
The total debt eligible for the Debt Warehousing Scheme since its introduction is €30.9 billion, of which 90% has been paid.
Revenue also confirmed the ongoing process to contact business availing of the Debt Warehousing Scheme. We provided an update on the notices being issues in Chartered Tax News last week. Mr Joe Howley, Collector-General, summarised the key advice to those businesses as follows:
“Over the next few days, I am writing to businesses currently availing of the Debt Warehousing Scheme reminding them that their warehoused debt remains parked, on an interest free basis, until the end of the year. For businesses impacted by the public health restrictions introduced in December 2021, debt remains parked until 30 April 2023. Businesses that are able to, and that want to, can pay off some or all of their debt at any time in the intervening period. The data we have published today shows that many businesses are deciding to pay their warehoused tax debt as soon as they are in a position to do so.
I am also reminding businesses that, while their tax debts are warehoused, they need to file current tax returns as they fall due and pay the associated tax liabilities on time. Any business that doesn’t do this, will lose the benefits of the Debt Warehousing Scheme. This means the tax debts of the business would become due for payment immediately. It also means the 0% interest rate that currently applies to warehoused debt, and the significantly reduced interest rate of 3% available in respect of payment arrangements entered into at the end of 2022 for warehoused debt, will not apply.”
Mr. Howley emphasised the importance of early action by businesses, currently availing of the scheme, that have outstanding tax returns:
“Businesses that have outstanding tax returns need to take action now to ensure they remain eligible for the scheme. Such businesses should file all outstanding returns by the end of April 2022. Having tax returns fully up to date means all tax debt eligible for the Debt Warehousing Scheme is quantified but most importantly if outstanding returns are not filed, the business concerned will lose the benefits of the scheme.
In short, once all returns for the warehouse period are filed, the only condition that businesses have to meet to retain the 0 and 3% interest rates is to file and pay current liabilities on time.”
Mr. Howley concluded by saying:
“Coming towards the end of this year, or early next year in the case of businesses impacted by the public health restrictions introduced in December 2021, a member of my team will make further contact with each business availing of the Debt Warehousing Scheme. Revenue will work with each business to put in place a tailored payment arrangement for its warehoused debts, over an agreed timeframe. The payment arrangement will take account of the financial circumstances of the business concerned and a reduced rate of interest of 3% will apply for the duration of the agreed payment schedule.
Businesses that wish to discuss their warehoused debt or that encounter any difficulties in meeting their current return and payment obligations, should contact Revenue via the MyEnquiries service or by telephone at 01-7383663. For businesses facing tax compliance challenges, engaging with Revenue at the earliest opportunity means we can agree a solution, including in respect of remaining eligible for the Debt Warehousing Scheme.”
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