Dáil Éireann Debate, Wednesday - 31 March 2021
346. Deputy Neale Richmond asked the Minister for Finance his plans to extend tax warehousing without penalty to the entertainment industry until mass gatherings are permitted again; and if he will make a statement on the matter. [17109/21]
View answer385. Deputy Louise O'Reilly asked the Minister for Finance if the tax debt warehousing scheme will remain available for businesses until the full lifting of all restrictions. [17264/21]
View answerI propose to take Questions Nos. 346 and 385 together.
I am advised by Revenue that the current tax warehousing schemes allow for the deferral of collection of certain tax liabilities relating to “Period 1”, the “Covid-19 restricted trading period”. The tax liabilities that may be deferred or “warehoused” are VAT, PAYE (Employer) liabilities, excess Temporary Wage Subsidy Scheme (TWSS) payments due to be refunded to Revenue by employers, and certain self-assessed income tax liabilities.
To be eligible for income tax warehousing, taxpayers have to declare that they estimated their total income for 2020 would be at least 25% less than their total income for 2019 and where applicable, that their total income for 2021 will be at least 25% less than their total income for 2019.
In the case of VAT, PAYE (Employer) and excess TWSS liabilities, Period 1 refers to the period when a business has been unable to trade due to the Covid-19 related restrictions and includes the first full two monthly VAT period after the business resumes trading.
Revenue has confirmed that where a business re-opened but has had to close again due to the re-imposition of restrictions, the trade is deemed to be still subject to the restrictions provided for in the regulations under sections 5 and 31A Health Act 1947 until it has re-opened again. This means that VAT, PAYE (Employer) and excess TWSS liabilities for such businesses can continue to be warehoused in respect of the extended restricted period.
The end date for Period 1, and consequently the period for which liabilities can be warehoused, will vary from business to business depending on the restrictions affecting that business. However, in all cases, Period 1 will include the duration for which a business is subject to trading restrictions plus the first full VAT period after the restrictions have been lifted and the business resumes trading.
Businesses in the entertainment sector that are currently eligible for warehousing will continue to be able to warehouse their liabilities from Period 1 until the restrictions for that sector are lifted.
Following the expiration of Period 1, businesses are afforded a further 12 months (“Period 2”) during which collection of warehoused liabilities will be deferred. No interest will be charged on outstanding Covid-19 liabilities in either Period 1 or Period 2. Payment of warehoused debts will not commence until after Period 2. Interest on warehoused liabilities is charged from this point on at c. 3% per annum until the liabilities are paid in full.
