As public health restrictions ease and businesses resume opening on a phased basis, Revenue reminds businesses resuming trade that the Debt Warehousing Scheme is still operational and there is no immediate requirement to pay warehoused debts. Sections 991B and 1080B TCA 1997, as well as section 114B VATCA 2010 and section 28C of the Emergency Measures in the Public Interest (Covid-19) Act 2020 provide the legislative basis for the operation of the scheme.
Under the scheme businesses can continue to warehouse tax debt for the initial months as restrictions are lifted. The tax debt will remain parked on an interest free bases for a year following the resumption of the trade and the expiry of the initial months. Revenue confirmed in a press release that “when the 12 month interest free period ends, the timeframe allowed to pay the warehoused debt will be flexible and determined by the capacity of the business to pay these arrears while also paying current tax liabilities as they arise in the normal course.”
The end of Period 1 and the commencement of Period 2, the 12-month interest free period, is determined by the VAT bi-monthly period in which the business ceases to be subject to restrictions plus two months, i.e., the end of the next full bi-monthly VAT period following the resumption of the trade. In circumstances where restrictions are re-imposed the period(s) between restrictions may also be warehoused i.e., from the initial imposition for the restrictions up to and including end of the next full bimonthly period following the resumption of trading in the latest round of restrictions.
Further information on the Debt Warehousing Scheme is available at Information booklet on debt warehousing and reduced rate of interest for outstanding 'non-COVID-19' debts. The information booklet contains a number of examples which will assist businesses in determining when Period 2 will commence for them.
LOADING...