Updated information booklet on debt warehousing and reduced interest rate PPAs

Nov 23, 2020

Revenue updated its Information Booklet on the warehousing of COVID-19 tax debts and the reduced interest rate on other tax debts to include additional sections on income tax and TWSS warehousing information, as well as the extension date for phased payment arrangements (PPAs) for 2019 income tax.

Debt warehousing - TWSS

Section 3.3 of the Information Booklet provides details on the general terms of the scheme for TWSS debts. Amounts that an employer is obligated to refund to Revenue, be they overpayments, amounts not passed on to employees or amounts that the employer was not entitled to receive, can be warehoused.

Employers will be notified of any TWSS overpayments through their ROS inbox in a Statement of Account for PAYE (EMP).

Employers whose tax affairs are dealt with in Revenue’s Personal Division or Business Division can have their excess TWSS debts warehoused automatically. LCD and MED cases can apply to have their TWSS overpayments warehoused.

Current taxes must be maintained for the duration of the warehouse period and for any subsequent arrangement period. Failure to meet current taxes will result in the warehousing facility being withdrawn. Tax clearance will not be affected where a warehousing arrangement is in place. Refunds and repayments of tax arising in ‘warehoused’ COVID-19 periods will not be offset against the warehoused debts, unless the employer chooses to offset such repayments.

Debt warehousing – income tax

Section 3.2 of the Information Booklet provides details on the general terms of the scheme for income tax debts. A self-assessed taxpayer can warehouse their 2019 income tax balancing payment and 2020 preliminary tax debts on filing the 2019 income tax return.

A declaration must be made to Revenue by the taxpayer that their total income for 2020 is expected to be at least 25 percent less than total income for 2019. Where the filing of the 2020 income tax return shows the taxpayer did not meet the requirement for a 25 percent reduction in income, the debt will be removed from warehousing, and the due date will revert to 31 October 2020 for both the 2019 and 2020 income tax returns and full statutory interest will apply.

Current taxes must be maintained for the duration of the warehouse period and for any subsequent arrangement period. Failure to meet current taxes will result in the warehouse 10 facility being withdrawn. Tax clearance will not be affected where a warehousing arrangement is in place. Refunds and repayments of tax arising in ‘warehoused’ COVID-19 periods will not be offset against the warehoused debts, unless the taxpayer chooses to offset such repayments.

PPAs for 2019 income tax

Taxpayers who are unable to warehouse 2019 Income Tax liabilities as they did not meet 2019 preliminary tax rules, may apply for a phased payment arrangement to discharge this liability and will be afforded the concessional rate of 3 percent on projected interest over the lifetime of the PPA. To avail of this measure, taxpayers must agree the phased payment arrangement with Revenue by 10 December 2020. Taxpayers should apply online via ROS for a PPA.

Further information is included in the Information Booklet.