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Debt Warehousing Scheme – Self-Review of Period 1 Liabilities

At the end of September 2022, Revenue began writing to all taxpayers participating in the Debt Warehousing Scheme (DWS) (or who were eligible to participate) to offer them the opportunity to “self-review” their returns for taxes eligible for warehousing in Period 1 and make an Unprompted Qualifying Disclosure in relation to any additional liabilities identified.

Approximately 300,000 Level 1 Revenue Compliance Intervention Notification letters issued in hard copy to eligible taxpayers.

The letters also issued to taxpayers dealt with by Personal and Business Divisions who were automatically eligible to avail of the DWS but did not avail of the scheme or exited at an early stage and paid their warehoused debt.

The letters outline that any additional undisclosed Employer-PAYE (PREM), VAT or income tax liabilities identified in respect of Period 1 can be included in the taxpayer’s debt warehouse, provided that the Unprompted Qualifying Disclosure is made by 31 January 2023.

This additional debt can be paid in full with the qualifying disclosure or included in a Phased Payment Arrangement (PPA), with payments to begin in 2023 at an interest rate of 3% per annum.

Templates of the letters are available below.

The provisions of the Code of Practice for Revenue Compliance Interventions apply to the disclosures, including the imposition of penalties and the requirement to fully co-operate with any Revenue enquiries in relation to an Unprompted Qualifying Disclosure.

Eligibility for Self-Review

Taxpayers dealt with by Personal Division and Business Division were automatically eligible for the DWS. However, the case-base of Business Division has changed since the DWS was introduced (for example, due to an increase in the turnover threshold for entry to the Medium Enterprises Division (MED) case-base and the movement of cases between the two divisions).

Eligibility for warehousing in the context of movement of cases in 2022:

  • Where a case moved from Business Division to MED: The case retains warehousing status.
  • Where a case moved from MED to Business Division: The case does not get warehousing by virtue of it now being in Business Division.
  • Where a case moved from MED to Business Division and had been approved for warehousing while in MED: The case retains warehousing status in Business Division.

In relation to eligibility for Self-Review of Period 1 Liabilities, Revenue confirmed the criteria to identify cases for a self-review letter in September were as follows:

  • Cases in Business Division: Received the self-review letter, whether they had debt/no debt parked in the warehouse at the time of the letter.
  • Cases in Business Division that were previously in MED and approved for warehousing when in MED: Received the self-review letter, whether they have debt/no debt parked in the warehouse at the time.
  • Cases in MED approved for warehousing: Received the self-review letter, only if they had debt in the warehouse at the time of the letter.
  • Cases in MED that were previously in Business Division and retain warehousing: Received the self-review letter, only if they had debt in the warehouse at the time of the letter.

Further Information on Revenue’s Level 1 Compliance Programme

The Institute provided additional detail on Revenue’s Level 1 Compliance Programme and clarifications from our discussions with Revenue at the TALC Audit Sub-committee in TaxFax on 23 September 2022.

Revenue released a 15-page Manual, Level 1 Compliance Programme – Debt Warehousing Scheme, on this Level 1 Compliance Programme on 26 September 2022.

The Institute published a news item on our homepage on 27 September 2022 to update members of Revenue’s Level 1 Compliance Programme.