Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The debt warehousing scheme allows for the deferral of the payment of VAT, PAYE and certain self-assessed income tax liabilities, including the temporary wage subsidy scheme, TWSS, and employment wage subsidy scheme, EWSS, overpayments. It provided a vital liquidity support to businesses during the Covid pandemic and continues to support businesses as they recover from the impacts of the pandemic and the energy crisis.

As of the end of March 2023, the value of debt warehoused was €2.216 billion for 63,600 businesses. Of this total: some 31% have warehoused debts of less than €100; some 15% have warehoused debts of between €101 and €1,000; and a further 19% have warehoused debts between €1,001 and €5,000. In total, 41,294 businesses in the warehouse - 65% of the total - have an outstanding balance of less than €5,000. The bulk of the debt figure is warehoused by just 6,462 customers, with outstanding balances greater than €50,000 totalling almost €1.9 billion of the overall figure of €2.2 billion.

Last October, the Revenue Commissioners announced an extension to the period during which debts can remain parked in the warehouse. This means that businesses no longer have the challenge of making arrangements to repay their warehoused debt until 1 May 2024. This significant additional time should greatly support businesses in their recovery from the impacts of the pandemic and the energy crisis and prevent business failure. Importantly also, businesses are still able to avail of the reduced 3% interest rate from 1 January 2023, as opposed to the general interest rate of 10% when they come to pay the debt.

With regard to the repayment of warehoused debt, from 1 May 2024, Revenue’s approach to collecting the tax debt remaining in the warehouse at that time will be flexible and tailored to each business, based on its capacity to pay. In advance of the repayment date, Revenue will engage with those businesses yet to agree a payment plan, to discuss their payment options and, where required, it will agree a tailored and phased payment arrangement in respect of the parked liability over an agreed timeframe.

See this speech in context