Revenue confirms Debt Warehousing Scheme remains available to support businesses impacted by current Level 5 restrictions
Today (13/01/21) Revenue confirmed that the Debt Warehousing Scheme remains available to support businesses experiencing tax payment difficulties arising from the current COVID-19 Level 5 public health restrictions, which are to remain in place until at least 31 January 2021.
The Debt Warehousing Scheme allows businesses to ‘park’ PAYE (Employer) and VAT tax debts arising from the COVID-19 crisis, as well as self-assessed income tax amounts (balance of 2019 Income Tax liability and 2020 preliminary tax) and Temporary Wage Subsidy Scheme overpayments. These debts can be ‘parked’ on an interest free basis for 12 months following resumption of trading. At the end of the 12-month interest free period, the warehoused debt may be paid in full without incurring an interest charge or paid through a phased payment arrangement at a significantly reduced interest rate of 3% per annum. This compares to the standard rate of 10% per annum that would otherwise apply to such debts.
Currently, approximately 70,000 businesses are availing of the scheme covering €1.9 billion in tax debt.
Following the recent move to Level 5 restrictions, Revenue confirmed that this vital liquidity support remains available, and businesses which have had to close can continue to warehouse current VAT and PAYE (Employer) liabilities.
Acknowledging the difficulties for businesses that have had to close again or remain closed, Collector-General, Joe Howley, said:
“The move to Level 5 public health restrictions at the end of December 2020 is going to further impact in what continues to be a most challenging and uncertain time for businesses. The Debt Warehousing Scheme was designed to alleviate financial burden and to give businesses certainty regarding the payment of tax debts. Any business experiencing trading difficulties as a result of COVID-19 restrictions can avail of the Debt Warehousing Scheme whether it had done so during the previous period(s) of trading restrictions or not. Businesses that did previously avail of the scheme and subsequently resumed trading and paying their tax debts as they arose can recommence using the scheme if their trade has again been impacted by the latest restrictions.”
The terms of the scheme remain the same in that access is automatic for SMEs and on request for larger businesses.
It also remains a requirement that the business continues to file all relevant tax returns for the restricted trading period(s) so that the tax debt can be included in the warehousing scheme.
[Ends 13/01/2021]