Dáil Éireann Debate, Thursday - 26 November 2020
210. Deputy John Brady asked the Minister for Finance if special provisions will be made by the Office of Revenue Commissioners for self-employed or sole traders who are not currently in a position to pay their full 2019 tax returns due to the impact of Covid-19 on their business; if a facility such as paying in instalments can be accommodated; and if he will make a statement on the matter. [39362/20]
View answerAs part of the response to COVID-19, the Government introduced a range of support measures for impacted businesses, including the Debt Warehousing scheme and a reduced interest rate of 3% for phased payment arrangements under certain conditions.
The initial Debt Warehousing scheme, which was put on a statutory footing in the Financial Measures (Covid-19) (No. 2) Act 2020 , provides for the deferral of unpaid VAT and PAYE (Employers) liabilities that arose due to COVID-19 related restrictions. The deferral is for a period of 12 months after a business resumes trading and attracts a 0% rate of interest (during that period). The scheme also allows for an extended repayment period after the initial 12 months has passed with an interest rate of 3% rather than the 10% rate that normally applies in such circumstances.
The Debt Warehousing scheme was extended in Budget 2021 to include self-assessed income tax in respect of 2019 (balancing payment) and 2020 preliminary tax. Access to the ‘warehouse’ for these liabilities, including the 0% and 3% interest rates, requires self-assessed taxpayers to have a projected reduction in income of at least 25% in 2020 compared to 2019 and to have fully paid their 2019 preliminary tax. The extended scheme also provides for the ‘warehousing’ of overpayments of the Temporary Wage Subsidy Scheme (TWSS).
Where ‘warehousing’ is not an option for self-employed taxpayers in respect of their 2019 balancing income tax payment and 2020 preliminary income tax payment, for example where they do not meet the eligibility criteria, they can still avail of a phased payment arrangement at the reduced 3% rate. Any such arrangement must be agreed with Revenue by 10 December 2020 and requires all outstanding tax returns to be filed so that the overall tax liability can be quantified and included in the phased payment agreement. Full details on the Debt Warehousing scheme are available on the Revenue website at link https://www.revenue.ie/en/corporate/communications/documents/debt-warehousing-reduced-interest-measures.pdf
