The Law Society has urged solicitors and law firms affected by the COVID-19 pandemic to familiarise themselves with Revenue’s policy on tax warehousing.
The Government announced a plan in early May to provide working capital support for businesses through the ‘warehousing of taxes’. Revenue is administering the scheme pending legislation.
The tax authority is not currently charging interest on 2020 VAT and PAYE liabilities incurred but not paid by the self-employed and businesses impacted by the virus restrictions. It has also suspended collection enforcement activities linked to these taxes.
The Law Society says, however, that businesses which have been and are continuing to pay VAT and PAYE when due may not be able to avail of the initiative.
“It looks like businesses may be able to hold on to taxes that they have not paid - and use this money as working capital for 12 months and beyond. However, there is no mention of refunding taxes that have been paid when due and of letting businesses involved use refunded money for 12 months,” the society warns.
It adds that self-employed solicitors should seek professional advice about the issue from their accountant or tax advisor.