Revenue announces important extension to the Debt Warehousing Scheme to support businesses
The Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic. Revenue have announced an important and significant extension to the Debt Warehousing Scheme in light of the current challenging economic situation for businesses.
Under the scheme, businesses with warehoused debt were due to enter into an arrangement with Revenue to deal with that debt by the end of the year (or by 1 May 2023 for those subject to the extended deadline).
Given the current economic uncertainty, Revenue has extended the timeline to 1 May 2024. This means that businesses will not now be faced with the challenge of either clearing the debt in the warehouse or entering into a phased payment arrangement to clear the debt until 1 May 2024.
Importantly also, businesses will still be able to avail of the reduced 3% interest rate from 1 January 2023, as opposed to the general interest rate of 10%, when they come to pay the debt.
Commenting on the extension, Collector-General, Mr. Joe Howley, said:
“Revenue appreciates the very significant challenges that businesses are currently experiencing in meeting their tax obligations, arising from the impacts of the energy costs crisis and the financial pressures these have placed on businesses as they continue their recovery from the pandemic. This extended deadline in terms of debt remaining in the warehouse, and the ongoing availability of the reduced rate of interest of 3%, will provide businesses with greater certainty in the current economic climate and give them additional time before they have to start addressing the warehoused tax debt. Where a business has the capacity to repay any or all of the debt warehoused in the meantime, then they can of course do so.“
Revenue will write to all businesses with debt in the warehouse in early December setting out their statement of debt in the warehouse and advising them of the extension announced.
Businesses are reminded of the importance of filing current returns and paying their current liabilities on time and as they arise and engaging early with Revenue where businesses experience any payment difficulties in meeting their current tax obligations:
It is a condition of debt warehousing that a business keeps current returns and payments up to date. Therefore any business that experiences a cashflow or temporary difficulty in meeting a tax liability should make contact with Revenue as soon as such a difficulty arises. This allows Revenue to proactively work with the business in finding an agreed solution to those temporary difficulties and therefoe ensuring that the business is able to continue to avail of the debt warehousing scheme.
Whilst every effort has been made to ensure the accuracy of matters covered by this article, no responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of matters above. Professional advice should always be sought before acting on any interpretation of matters covered by this article.
18 October 2022