Revenue Note for Guidance

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Revenue Note for Guidance

991B Covid-19: Special warehousing and interest provisions

Summary

This section provides for “warehousing” or suspension of collection of PAYE (Employer) liabilities incurred while trading was restricted during the Covid-19 Pandemic (“Covid-19 liabilities”).

The provision applies to businesses who, as a consequence of Covid-19 related trading restrictions, are unable to pay their “Covid-19 liabilities” and who have filed all required returns.

All “small and medium enterprises” (SMEs) whose tax affairs are dealt with in Revenue’s Business Division or Personal Division qualify automatically. Other taxpayers will qualify if they can show their business has been adversely affected by Covid-19.

Details

(1) Subsection (1) defines various terms used in the section.

“the Acts” outlines the provisions an employer must comply with to qualify for debt warehousing, including the legislation relating to the Domicile Levy and USC, Stamp Duties Consolidation Act 1999, Capital Acquisitions Tax Consolidation Act 2003 and the Value-Added Tax Consolidation Act 2010 amongst others;

“Covid-19” takes it’s meaning from the Emergency Measures in the Public Interest (Covid-19) Act 2020;

“Covid-19 entitlement” means an entitlement to payment under one of a number of Covid-19 support schemes listed in the section including the Covid Restrictions Support Scheme, the Employment Wage Subsidy Scheme, various schemes administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, the Department of Transport, Fáilte Ireland and Enterprise Ireland, as well as schemes with a similar objective that may be approved by the Revenue Commissioners;

“Covid-19 liabilities” means the PAYE (Employer) liabilities that an employer was due to pay during Period 1 and which may be warehoused.

The three periods of the scheme, which are:

  • Period 1, which runs from the date the business of the employer was adversely affected by Covid-19 (beginning no earlier than February 2020 until 31 December 2021),
  • Period 2, which runs from 1 January 2022 until 31 December 2022, and
  • Period 3, which runs from 1 January 2023 until the employer has paid the liabilities.

(1A) Where an employer has an entitlement to payment under one of the Covid-19 support schemes listed above, Period 1 for that employer is extended by four months until 30 April 2022. Period 2 is amended to run from 1 May 2022 to April 2023 and Period 3 is amended to run from 1 May 2023 until the warehoused liabilities have been repaid in full.

(2) The business of an employer will be treated as “adversely affected” by Covid-19 on the date on which the Revenue Commissioners agreed to temporarily suspend the collection of Covid-19 liabilities because of the effect on the employer’s business of Covid-19 trading restrictions.

(3) Debt warehousing will only apply to employers who, because of Covid-19, are unable to pay their Covid-19 liabilities and who have filed all required PAYE (Employer) returns. All “small and medium enterprises” (SMEs) whose tax affairs are dealt with in Revenue’s Business Division or Personal Division will qualify automatically. Other employers must notify Revenue that they have formed the opinion that they are unable to pay their Covid-19 liabilities.

(4) Whether or not an employer is dealt with by Revenue’s Personal Division or Business Division will be determined by the most recent correspondence received by the employer from Revenue.

(5) An inspector or other officer nominated under section 990 TCA may carry out enquiries to satisfy herself/himself that an employer is unable to pay their Covid-19 liabilities and to verify an employer’s entitlement to payment under one of the specified Covid-19 support schemes.

(6) Provided the conditions set out in section 991B are met, interest under section 991 TCA (c. 10% per annum) will not apply to the late payment of Covid-19 liabilities.

(8) Where—

  • this section applies to an employer,
  • the employer complies with their obligations under the Acts,
  • before 1 May 2024, the employer engages with the Collector General to agreement a payment arrangement for their Covid-19 liabilities and either before or after 1 May 2024 enters into such an arrangement, and
  • the employer complies with this arrangement entered into in respect of their Covid-19 liabilities,

no interest will apply to the employer’s Covid-19 liabilities during Period 1, Period 2 and Period 3.

(10) Subsection (10) sets out the circumstances that will result in an employer being removed from the debt warehouse and how interest will be calculated in these scenarios.

Where, at any point between day 1 of Period 1 and 30 April 2024, an employer fails to comply with their obligations under the Acts, the employer will be removed from the warehouse and interest will be applied to the amount of their Covid-19 liabilities remaining unpaid on the date of the event that resulted in non-compliance, calculated at a rate of c. 10% per annum (or 0.0274% per day) from that date until the outstanding Covid-19 liabilities are paid in full.

Where an employer has not, before 1 May 2024, engaged with the Collector General to agree a payment arrangement to discharge their Covid-19 liabilities, and has not, either before or after 1 May 2024 entered into such an agreement, they are removed from the warehouse with effect from day 1 of Period 3. Interest in this case applied to the amount of Covid-19 liabilities outstanding on 1 May 2024, calculated at c. 10% per annum from day 1 of Period 3.

Where an employer fails to comply with their obligations under the Acts on or after 1 May 2024 or fails to comply with the terms of the payment arrangement entered into in respect of their Covid-19 liabilities, they are removed from the warehouse with effect from the date of the happening of the event which gave rise to non-compliance. Interest at a rate of c. 10% per annum or 0.0274% per day applies calculated from 1 May 2024 until the Covid-19 liabilities have been paid in full.

(12) Warehousing of Covid-19 liabilities will not prevent an employer obtaining tax clearance under either section 1094 or 1095 TCA provided the employer complies with the requirement to file returns under this Chapter.

(13) The Collector General will not issue demands in respect of Covid-19 liabilities provided the employer complies with the obligation to file returns required under this Chapter.

(14) Provision has been made for warehousing of Covid-19 liabilities where an employer files PAYE returns on a quarterly or annual basis. For such employers, their “Covid-19 liabilities” – that is, the tax debt which will be warehoused - will include liabilities of income tax months which are paid at the same time as income tax months within Period 1 in the normal definition. For example, if an employer pays its PAYE (Employer) liabilities quarterly and pays its January 2020 liability at the same time as its February and March 2020 liabilities, the liabilities for January 2020 will be warehoused.

Relevant Date: Finance Act 2024