Insights
The debt warehousing scheme was introduced in 2020 during the Covid-19 pandemic for businesses who were struggling with cash flow and experienced a decrease in turnover or volume of orders. The scheme allowed businesses to defer some of their tax liabilities until they were able to pay them. Revenue have recently updated their terms on the Debt Warehousing Scheme, they are as follows.
Businesses who are up to date with their tax returns will be sent a notice outlining the total debt warehoused to date. Revenue will contact businesses by end of 2022 and the start of 2023 to make arrangements to pay back the warehoused debt at a 3% interest rate.
Business who are not up to date with their tax returns must do so by the end of April or they will lose the benefits of the Debt Warehousing Scheme. If the tax returns are not up to date by this period, the debt would be immediately due for repayment with an 8-10% interest rate per year.
According to Revenue,
A total of 250,000 businesses have been eligible to avail of the Debt Warehousing since the scheme began. Of these:
· 59% paid all their taxes in the month it was due or, having initially availed of the Debt Warehousing Scheme, have since paid their tax debts in full
· 36% have part paid their warehoused debt and are continuing to avail of the scheme for about €2.7 billion in tax debt
· 5%, equating to less than 12,000 businesses, continue to avail of the scheme in respect of all their Covid-19 related tax debts totalling €300 million.
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