Tuesday, 12 October 2021
Department of Finance
120. To ask the Minister for Finance the number of businesses availing of debt warehousing with the Revenue Commissioners; the total amount of debt that is warehoused; if the Revenue Commissioners estimated the amount of this debt that will not be paid; and if it is included in the published tax receipts for 2021. [49419/21]
The Debt Warehousing Scheme remains available to support businesses that are experiencing tax payment difficulties arising from the COVID-19 pandemic. The scheme applies to VAT debts, PAYE (Employer) debts, certain self-assessed income tax amounts and overpayments of both the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS). To qualify for debt warehousing, a business must continue to file all tax returns, even though the liability cannot be paid.
For eligible businesses, Period 1, the period during which tax debts may be warehoused, has been extended to 31st December 2021, and tax debts can then be ‘parked’ interest-free until 31st December 2022. At that point, the warehoused debt may be paid in full without incurring an interest charge or can be paid through a tailored phased payment arrangement starting in 2023 at a significantly reduced interest rate of 3% per annum. This compares to the standard rate of 8% or 10% per annum that would otherwise apply to such debts.
Revenue has advised me that the total amount of debt warehoused at the end of September 2021 was €2.7 billion in respect of over 93,000 businesses. At the end of 2022, Revenue will engage with all businesses availing of the scheme to agree a suitable phased payment arrangement in respect of the ‘parked’ liability. These arrangements will be flexible and will be extended to suit individual financial circumstances, providing current taxes are paid as they fall due. Revenue has not estimated the potential amount of warehoused debt that will not be paid as the expectation at this point is that flexible payment arrangements will assist businesses in meeting their obligations over time.
Finally, the value of the debt warehoused is not included in the published tax receipts for 2021 as the debt has been ‘parked’, therefore it has not been collected. Where businesses opt to make an early payment of these debts in 2021, this figure will be included in the published tax receipts. Further information on the Debt Warehousing Scheme is available on the Revenue website.