Important Update on the Debt Warehousing Scheme

This week, Revenue is sending Important Information Notices to all businesses that are availing of the Debt Warehousing Scheme. These Notices are intended to provide businesses with certainty regarding their participation in the Scheme, outline next steps and if relevant, highlight the immediate action required to ensure that some businesses do not lose the benefits of the Scheme.

Businesses fully up-to-date with their tax returns

Businesses that are fully up-to-date with their tax returns will receive a Notice outlining the total tax debt warehoused to date for the business. This will be broken down by tax head, period and the amount of debt warehoused. The Notice also advises that Revenue will contact the business to discuss terms for paying the warehoused debt. This will happen before the end of 2022 or early 2023 if the business qualified for the extension to the Debt Warehousing Scheme announced in December 2021.

Revenue intends to work with each business to put in place a tailored payment arrangement for its warehoused debts over an agreed timeframe. This payment arrangement will be at a 3% rate of interest. Businesses that can afford to start paying the warehoused debt before it is due, under the rules of the Debt Warehousing Scheme, can do so without incurring interest charges on these early payments.

Businesses with tax returns outstanding

Businesses that have tax returns outstanding will not be provided with details of their warehoused tax debt in the Notice. The Notice will list the tax returns that are outstanding which must be filed before the warehoused debt can be confirmed. These outstanding returns must be submitted to Revenue by 30 April 2022 or the business will lose the benefits of the Debt Warehousing Scheme.

Should a business lose the benefits of the Scheme, the tax debt that has been ‘parked’ would immediately become due for payment and the normal interest rates for late payment of tax (8%/10% per annum) would apply. Therefore if a business has tax returns outstanding, it should act quickly and engage with its tax adviser to bring such tax returns up-to-date. The Notices also advise businesses which filed some tax returns on a “best estimates” basis during the pandemic should ensure that those returns are finalised by 30 April 2022.

Keeping up-to-date with current tax obligations

A general requirement of the Debt Warehousing Scheme is that businesses keep up-to-date with their current tax obligations. If a business is experiencing difficulty with this requirement, Revenue should be contacted at an early stage to agree a solution that would allow the business to continue to avail of the Scheme. Contact details for Revenue’s Collector General’s Division is provided on all the Notices issuing.

Revenue Information Notices

Most of these Revenue Information Notices will issue to businesses by post, but some will issue to the ROS inbox of the business. Sample copies of the four types of Notices issuing are available on the Revenue website. The Notices are tailored to the circumstances of the business, i.e. based on whether or not the business qualified for the extension to the Debt Warehousing Scheme to 30 April 2022 and if tax returns are outstanding.

Revenue’s press release today on the Debt Warehousing Scheme Notices and the latest statistics

On 31 March, Revenue issued a press release on these important Notices. The press release also includes updated statistics on the Debt Warehousing Scheme and a letter from Revenue Chairman, Niall Cody, to the Minister for Finance, Paschal Donohoe T.D., with Revenue’s analysis of the Scheme.

The updated statistics published 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 Warehousing Scheme since it began. However, a large proportion of eligible businesses have continued to pay their taxes as they fell due or subsequently, fully or partly paid the warehoused tax debt.

The total debt eligible for the Debt Warehousing Scheme since its introduction is €30.9 billion. However, 90% of that debt has been paid. Revenue’s 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.

Revenue’s press release includes links to detailed information on recent developments.