REVENUE HAS EXTENDED a scheme that enables businesses to delay paying certain tax debts by an additional sixteen months.
Debts that were ‘warehoused’ during the Covid-19 pandemic to keep businesses afloat were due to be paid back by the end of this year, or by 1 May 2023 for some on an extended deadline.
Revenue has now pushed the repayment date out to 1 May 2024.
Additionally, when businesses pay the debt, they will be able to avail of a reduced 3% interest rate from 1 January 2023 instead of the general interest rate of 10%.
Revenue said the extension is being granted due to current challenging economic circumstances for businesses.
During the pandemic, Revenue suspended debt collection for VAT and employer PAYE that businesses incurred while their trade was stopped completely or significantly reduced due to Covid-19.
Employers who owed a reconciliation balance from the Temporary Wage Subsidy Scheme but who were eligible for debt warehousing could also have that balance warehoused.
Of €2.58 billion warehoused debt, €2.2 billion is warehoused by 7,500 taxpayers, while almost 50,000 have debts of less than €5,000 each warehoused.
At its height, €3.1 billion of debt was warehoused.
In a statement, Revenue Collector-General Joe Howley said that businesses are currently experiencing difficult challenges in meeting their tax obligations due to rising energy costs that have compounded financial pressures while recovering from the pandemic.
“This extended deadline in terms of debt remaining in the warehouse, and the ongoing availability of the reduced rate of interest of 3%, will provide businesses with greater certainty in the current economic climate and give them additional time before they have to start addressing the warehoused tax debt,” Howley said.
“Where a business has the capacity to repay any or all of the debt warehoused in the meantime, then they can of course do so.”
Businesses with warehoused debt will receive communication from Revenue in early December outlining their position and advising them of the extension. These businesses will also be reminded of the “importance of filing current returns and paying their current liabilities on time and as they arise”.
Howley said that “because it is a condition of debt warehousing that a business keeps current returns and payments up to date, any business that experiences a cashflow or temporary difficulty in meeting a tax liability as it arises should be proactive and make contact with Revenue as soon as such a difficulty arises”.
“Early engagement allows us to work proactively with the business concerned towards finding an agreed solution to those temporary difficulties. That agreed solution will, in turn, ensure that the business is able to continue to avail of the debt warehousing scheme.”
To embed this post, copy the code below on your site
have your say