Jim O'Callaghan
Question:298. Deputy Jim O'Callaghan asked the Minister for Finance the status of the operation of the debt warehousing scheme; and if he will make a statement on the matter. [22196/21]
View answerWednesday, 28 April 2021
Questions (298)
Written answers
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, self-assessed income tax amounts (balance of 2019 income tax liability and 2020 preliminary tax) and Temporary Wage Subsidy Scheme (TWSS) overpayments. Approximately 85,000 businesses are currently availing of the scheme covering €2.3 billion in tax debt.
The scheme allows businesses to ‘park’ these debts on an interest free basis for 12 months following the resumption of trading. At the end of the 12-month interest free period, the warehoused debt may be paid in full without incurring an interest charge or paid through a tailored phased payment arrangement 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.
Businesses that availed of the Debt Warehousing Scheme at the start of the pandemic and subsequently resumed trading for a period during 2020 before being further restricted can recommence availing of the support. As such, they can warehouse relevant tax debts from the beginning of the initial lockdown, including in respect of the period/s during which they were trading between lockdowns. Revenue has communicated directly with those who previously availed of the scheme to inform them of its continued availability.
Access to the scheme is automatic for SMEs and by agreement with larger businesses that have been negatively impacted by the pandemic. A key requirement of the scheme is that businesses continue to file all relevant tax returns for the restricted trading period(s), so that the tax debt can be quantified and warehoused.