The Tax Debt Warehousing scheme allowed businesses to temporarily defer VAT and Employer PAYE, certain self-assessed income tax liabilities, and Temporary Wage Subsidy Scheme and Employment Wage Subsidy Scheme overpayments on an interest-free basis for an extended period of time, and the Minister recently announced (5 February 2024) that the applicable interest rate of 3 per cent has been reduced to 0 per cent.
The Minister notes the flexible approach being taken by Revenue in working with customers on a case-by-case basis and giving them every support in managing their liabilities over a timeline that suits the particular circumstances of their business. Revenue will continue to apply this flexible and pragmatic approach, provided that businesses meet the key conditions of the scheme, namely, (i) that they continue to file their current tax returns and pay current liabilities as they fall due, and (ii) that they engage with Revenue in advance of 1 May to agree a payment plan for their warehoused debt.
The payment of current taxes and arrears outside the warehouse periods is a key indicator of the business’s viability and allows maximum flexibility for the warehoused debt. In the main these current taxes are Employers PAYE and PRSI amounts deducted from employees and VAT charged to customers.
The Minister also notes that at the end of March Revenue wrote to customers providing them with a schedule of their debt and highlighting the immediate action required before 1 May 2024 to address the debt and the flexible payment options available.
While the total amount of debt warehoused has decreased by €1.5 billion since January 2022, €1.65 billion remains outstanding in respect of 55,490 individual taxpayers. Approximately 70 per cent of customers with debts in the warehouse owe amounts less than €5,000. The bulk of the debt (€1.41 billion) is warehoused by 5,040 customers with outstanding balances greater than €50,000.
A total of 2,760 customers had agreed PPAs for €237 million of warehoused debt at 31 March 2024.
The Minister further notes the proactive approach by Revenue in refunding customers who have paid interest at 3 per cent, and by adjusting the terms of active Phased Payment Arrangements (PPAs).
Commenting on the latest statistics, Minister McGrath stated:
“The reducing amount of debt in the warehouse and the associated number of customers involved demonstrates that businesses are working with Revenue to pay the amounts due. However, the liabilities of over 55,000 customers remain in the warehouse. Many of these customers have engaged with Revenue, as is evidenced by the increase in numbers of PPAs in place, however, for those businesses that have not already done so, the key message is that they should engage with Revenue now, in order to agree arrangements to address their debts and avail of the flexibilities being offered in relation to this debt. Taxpayers must have submitted their application for a Phased Payment Arrangement (PPA) using Revenue’s online Service (ROS) by 1 May 2024, where appropriate.
It is important to note that, businesses are not required to pay all of their warehoused debt by 1 May 2024. However, in order to avail of the 0 per cent interest and flexible payment options, they are required to engage with Revenue to make arrangements to pay the debt over an agreed period of time, based on their individual circumstances and capacity to pay. A key condition of the scheme is that taxpayers continue to file their current tax returns on time and meet their current tax liabilities as they fall due.
Finally, I welcome the pragmatic and fair approach being taken by Revenue and their efforts in assisting their customers agree a realistic payment plan tailored to their particular circumstances.”
