Revenue has confirmed that the Debt Warehousing Scheme remains available to support businesses experiencing tax-payment difficulties arising from the current COVID-19 level-five public-health restrictions, which are to remain in place until at least 31 January.
The Debt Warehousing Scheme allows businesses to ‘park’ PAYE (employer) and VAT tax debts arising from the COVID-19 crisis, as well as self-assessed income-tax amounts (balance of 2019 income tax liability and 2020 preliminary tax), and Temporary Wage Subsidy Scheme overpayments.
These debts can be ‘parked’ on an interest-free basis for 12 months following resumption of trading.
At the end of the 12-month interest-free period, the warehoused debt may be paid in full without incurring an interest charge, or paid through a phased payment arrangement at a significantly reduced interest rate of 3% per annum.
This compares with the standard rate of 10% per annum that would otherwise apply to such debts.
Currently, approximately 70,000 businesses are availing of the scheme, covering €1.9 billion in tax debt.
Following the recent move to level-five restrictions, Revenue has confirmed that this liquidity support remains available, and businesses that have had to close can continue to warehouse current VAT and PAYE (employer) liabilities.
The terms of the scheme remain the same, in that access is automatic for SMEs, and on request for larger businesses.
It also remains a requirement that the business continues to file all relevant tax returns for the restricted trading period(s) so that the tax debt can be included in the warehousing scheme.
For tax purposes, an SME is a business with turnover of less than €3 million, and which is managed by Revenue’s Business Division.