Revenue statistics show majority of businesses eligible for the Debt Warehouse are meeting tax payment obligations

Today (31/3/2022), Revenue confirmed it had written to the Minister for Finance, Paschal Donohoe, T.D., to provide an update on the Debt Warehousing Scheme. Under the scheme, businesses can temporarily ‘park’ certain Covid-19 related tax debts on an interest free basis until the end of 2022 or until 30 April 2023 for businesses impacted by the public health restrictions introduced in December 2021.

Updated Debt Warehousing Scheme statistics published by Revenue today show that, as at the end of January 2022, almost 105,000 businesses were availing of the scheme in respect of over €3 billion in tax debts.

A total of 250,000 businesses have been eligible to avail of the Debt Warehouse since the scheme began. Of these:

• 59% paid all their taxes in the month it was due or, having initially availed of the Debt Warehousing Scheme, have since paid their tax debts in full
• 36% have part paid their warehoused debt and are continuing to avail of the scheme for about €2.7 billion in tax debt
• 5%, equating to less than 12,000 businesses, continue to avail of the scheme in respect of all their Covid-19 related tax debts totalling €300 million.

The total debt eligible for the Debt Warehousing Scheme since its introduction is €30.9 billion. However, 90% of that debt has been paid. Today published statistics show that €23.1 billion was paid in the month it was due, a further €4.9 billion was paid after the due month while the remaining €3 billion is currently warehoused. This €3 billion represents approximately 10% of the total tax debt eligible for the scheme

Also today, Revenue confirmed that it is in the process of contacting all businesses currently availing of the Debt Warehousing Scheme. Summarising the key advice to such businesses, Collector-General, Mr. Joe Howley, said:

“Over the next few days, I am writing to businesses currently availing of the Debt Warehousing Scheme reminding them that their warehoused debt remains parked, on an interest free basis, until the end of the year. For businesses impacted by the public health restrictions introduced in December 2021, debt remains parked until 30 April 2023. Businesses that are able to, and that want to, can pay off some or all of their debt at any time in the intervening period. The data we have published today shows that many businesses are deciding to pay their warehoused tax debt as soon as they are in a position to do so.

I am also reminding businesses that, while their tax debts are warehoused, they need to file current tax returns as they fall due and pay the associated tax liabilities on time. Any business that doesn’t do this, will lose the benefits of the Debt Warehousing Scheme. This means the tax debts of the business would become due for payment immediately. It also means the 0% interest rate that currently applies to warehoused debt, and the significantly reduced interest rate of 3% available in respect of payment arrangements entered into at the end of 2022 for warehoused debt, will not apply.”

Mr. Howley emphasised the importance of early action by businesses, currently availing of the scheme, that have outstanding tax returns:

“Businesses that have outstanding tax returns need to take action now or risk losing the benefits of the scheme. To ensure they remain eligible, they should file all outstanding returns by the end of April 2022. Having tax returns fully up to date means all tax debt eligible for the Debt Warehousing Scheme is quantified but most importantly if the outstanding returns are not filed, they will lose the benefits of the scheme.

In short, once all returns for the warehouse period are filed, the only condition that businesses have to meet to retain the 0 and 3% interest rate is to file and pay current liabilities.”

Mr. Howley concluded by saying:

“Coming towards the end of this year, or early next year in the case of businesses impacted by the public health restrictions introduced in December 2021, a member of my team will make further contact with each business availing of the Debt Warehousing Scheme. Revenue will work with each business to put in place a tailored payment arrangement for its warehoused debts, over an agreed timeframe. The payment arrangement will take account of the financial circumstances of the business concerned and a reduced rate of interest of 3% will apply for the duration of the agreed payment schedule.

Businesses that wish to discuss their warehoused debt or that encounter any difficulties in meeting their current return and payment obligations, should contact us via the MyEnquiries service or by telephone at 01-7383663. For businesses facing tax compliance challenges, engaging with Revenue at the earliest opportunity means we can agree a solution, including in respect of remaining eligible for the Debt Warehousing Scheme.”

Updated Debt Warehousing Scheme statistics published earlier today are available on the Revenue website.

Sample copies of the letters currently issuing to businesses availing of the Debt Warehousing Scheme can be found on the Revenue website.

[Ends 31/3/2022]

Notes for the editor:

A copy of the letter from Revenue Chairman, Niall Cody, to the Minister for Finance, can be found here.