Marketing

Debt Warehousing Scheme extended to May ’24

The Revenue Commissioners have announced an extension to the Debt Warehousing Scheme in light of the current challenging economic situation for businesses.  
Businesses will still be able to avail of the reduced 3% interest rate from the 1st of January next year as opposed to the general interest rate of 10%, when they come to pay that debt.

Businesses will still be able to avail of the reduced 3% interest rate from the 1st of January next year as opposed to the general interest rate of 10%, when they come to pay that debt.

 

Under the original 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 the 1st of May 2023 for those subject to the extended deadline).

Given the current economic uncertainty however Revenue has extended this timeline to the 1st of May 2024. This means that businesses will not now have to face the challenge of either clearing the debt in the warehouse or entering into a phased payment arrangement to clear the debt by the 1st of May next year but now have until the 1st of May 2024 instead.

Importantly too, businesses will still be able to avail of the reduced 3% interest rate from the 1st of January next year as opposed to the general interest rate of 10%, when they come to pay that debt.

“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,” said Collector-General Joe Howley in commenting on the extension, “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. “

In early December Revenue will write to all businesses with debt in the warehouse, setting out their statement of debt and advising them of the extension.

“Because it’s a condition of debt warehousing that a business keeps current returns and payments up-to-date, any business that experiences a cashflow or temporary difficulty in meeting a tax liability as it arises should be proactive and make contact with Revenue as soon as such a difficulty arises,” he emphasised, “As I’ve said on other occasions, early engagement allows us to work proactively with the business concerned towards finding an agreed solution to those temporary difficulties. That agreed solution will, in turn, ensure that the business is able to continue to avail of the debt warehousing scheme.”

The Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic.

Revenue statistics show that the bulk of the €2.58bn warehoused debt – €2.2 billion of it – is warehoused by 7,500 taxpayers and a very large cohort of taxpayers (almost 50,000) have debts of less than €5,000 warehoused.

“The Debt Warehousing Scheme has provided a valuable support for businesses and at its height over €3.1bn in debt was warehoused,” concluded Joe Howley, “We’re now at under €2.6bn. There are currently just over 27,000 taxpayers with warehoused debts in excess of €5,000 and these include more than 19,000 employers who employ over 315,000 employees.”

Updated Debt Warehousing Scheme statistics are available on the Revenue Website .

 

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