Wednesday, 20 May 2020
Department of Finance
In respect of the measures to which the Deputy refers and for which my Department is responsible, I am advised by Revenue that the effective “warehousing” of VAT and PAYE (Employer) liabilities is currently operational. In March this year, Revenue announced that it was suspending debt collection and the charging of interest on late payment for the January/February and March/April 2020 VAT periods and the February, March and April 2020 PAYE (Employer) periods. On 7 May 2020, Revenue announced the extension of these arrangements to include the May/June 2020 VAT period and May and June 2020 PAYE (Employer) liabilities. These measures are being operated by Revenue on an administrative basis under the care and management provisions of the Taxes Consolidation Act 1997.
However, primary legislation will be required to put the measures on a statutory footing and to provide for the appropriate rate of interest to be changed on the warehoused debts, namely:
- 0% for the “Covid-19 restricted trading phase”, the period when the business is unable to trade due to the Covid-19 related restrictions, and including the first two months after the business resumes “normal” trading;
- 0% for the “zero interest” phase, which lasts for 12 months after the end of the first phase;
- 3% per annum for the “reduced interest phase”, which begins after the end of the second phase.
The necessary legislative amendments to the relevant provisions of the Taxes Consolidation Act 1997 and the Value Added Tax Consolidation Act 2010 will be brought forward in due course. Further information on tax debts warehousing is available on the Revenue website here.
The Deputy may wish to note that the establishment of the Ireland Strategic Investment Fund (ISIF) Pandemic Stabilisation and Recovery Fund will not require statutory amendment. ISIF will complete a revised investment strategy (under section 40 of the National Treasury Management Agency (Amendment) Act 2014) over the coming weeks.
I can also advise the Deputy that my colleague, the Minister for Business, Enterprise, and Innovation, will be bringing forward legislation to implement the €2 billion Credit Guarantee Scheme, which will support lending to SMEs for terms ranging from 3 months to 6 years at below market interest rates.