The Government is to reduce to zero the interest rate on tax owed by businesses under a scheme introduced during the COVID-19 pandemic.

Thousands of businesses took advantage of the Tax Debt Warehousing scheme, which allowed them to put off paying certain taxes until 1 May 2024.

Revenue has also confirmed that, where a business has already paid warehoused debt, which had been subject to interest at 3%, it will receive a refund of that interest.

Pressures

Firms that still owe tax now have until 1 May to either pay their warehoused debt in full, or “engage meaningfully” with Revenue to agree a phased-payment arrangement (PPA).

The Minister for Finance Michael McGrath said that the Government was “acutely aware” of the ongoing cost pressures faced by firms, and was determined to give viable businesses “every chance” to succeed.

He is to bring forward the necessary legislation to implement the change, but Revenue will apply it on an administrative basis in the meantime.

Payment arrangements

The minister also noted a statement by Revenue confirming that it was taking a flexible approach to working with customers on warehoused debt.

The Department of Finance said that this would include the possibility of extending payment arrangements beyond the typical three- to five-year duration on a case-by-case basis, adding that an initial down-payment might not always be required.

Recent Revenue figures show that €1.72 billion of warehoused debt, linked to 57,500 businesses, remains outstanding.