Minister McGrath encourages businesses availing of Tax Debt Warehousing scheme to engage with Revenue ahead of 1 May
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From: Department of Finance
- Published on: 17 April 2024
- Last updated on: 12 April 2025
The Minister for Finance Michael McGrath has today (Wednesday 17 April 2024) encouraged businesses availing of the Tax Debt Warehousing scheme to engage early with Revenue ahead of the 1 May 2024 deadline, to discuss their individual circumstances and agree arrangements to address their liabilities.
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.”
Notes
Introduced in 2020, the Tax Debt Warehousing scheme allowed businesses to temporarily defer VAT and Employer PAYE, certain self-assessed income tax liabilities, and Wage Subsidy Scheme and Employment Wage Subsidy Scheme overpayments on an interest-free basis for an extended period of time, up to 31 December 2022, or until 30 April 2023 for those who received certain COVID supports. After this, a 3 per cent interest rate was applicable until the debt is either repaid or the customer otherwise exits the warehouse. On 5 February 2024, the Minister for Finance announced that the applicable interest rate for debt in the warehouse has been reduced to 0 per cent.
The Scheme has offered valuable and practical liquidity support to businesses during the COVID-19 pandemic and continues to support businesses as they recover from the impacts of the pandemic and the cost of living crisis. It has assisted businesses with their cash-flow during difficult trading periods, preventing business failure.
Taxpayers have until 1 May 2024, to either pay their warehoused debt, or engage meaningfully with Revenue to make arrangements to pay the debt over an agreed period of time (personalised Phased Payment Agreement.
The total debt eligible since the introduction of the scheme was €30.9 billion, with over 250,000 businesses being eligible to warehouse debt. At the peak of the scheme in January 2022, there was €3.2 billion in the warehouse (in respect of almost 105,000 individual entities). As at 31 March 2024, the balance in the warehouse had reduced to €1.65 billion, with the significant majority of this reduction due to payments by customers. This balance is owed by 55,490 customers, with 70% of those customers having outstanding liabilities of 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.
Following the Minister’s announcement on 5 February 2024, that the applicable interest rate would be reduced to 0 percent, Revenue has confirmed it will operate the reduced rate on an administrative basis pending the legislative change which will be introduced at the next available opportunity.
Customers are encouraged to engage with Revenue at the earliest opportunity to discuss their individual circumstances and agree arrangements to address their liabilities.