Dáil Éireann Debate, Thursday - 27 May 2021
127. Deputy Joe O'Brien asked the Minister for Finance if consideration will be given to permitting self-employed persons who have been out of work during the pandemic to warehouse their tax liability for 2020 for a period of time until their finances have recovered; and if he will make a statement on the matter. [28815/21]
View answer133. Deputy Louise O'Reilly asked the Minister for Finance if self-employed persons, such as taxi drivers, will be allowed to warehouse their tax liability for 2020 and repayment schedules arranged with the Revenue Commissioners; and if he will make a statement on the matter. [28919/21]
View answerI propose to take Questions Nos. 127 and 133 together.
The Finance Act 2020 legislated for warehousing of certain income tax liabilities of self-assessed income taxpayers, including the self-employed, whose income has been affected by the restrictions introduced to combat Covid-19. I am advised by Revenue that the debt warehousing scheme already provides for the warehousing of income tax liabilities for 2020 and, where appropriate, 2021, for taxpayers who meet the eligibility criteria.
The liabilities that may be warehoused under this scheme are the balance of self-assessed income tax, PRSI and USC for 2019 and preliminary tax, PRSI and USC for 2020, which were due to be paid on or before 31 October 2020, or 10 December 2020 where the individual filed electronically through ROS; and, in certain circumstances, the balance of self-assessed income tax, PRSI and USC for 2020 and preliminary tax, PRSI and USC for 2021, which are due to be paid on or before 31 October 2021 or 17 November2021, if filed electronically.
To qualify for warehousing, an individual must declare that s/he estimates her/his total income for 2020 or 2021, as appropriate, will be at least 25% lower than her/his total income for 2019, due to the impact of Covid-19 restrictions. If the individual was not a self-assessed taxpayer in 2019, s/he will be eligible for warehousing if, as a result of the effect on her/his income of Covid-19 restrictions, s/he is unable to pay her/his income tax liabilities in 2020 or 2021. Where the relevant condition is satisfied, any self-assessed taxpayer is eligible for income tax warehousing, regardless of what sector s/he operates in.
The “Covid-19 income tax” will be subject to 0% interest for a period of twelve months and 3% interest per annum thereafter until the liability is paid in full. Where an individual is eligible for warehousing of the balance of 2020 income tax, PRSI and USC and preliminary income tax, PRSI and USC for 2021, s/he can avail of 0% interest on the warehoused amounts for an additional twelve months.
To avail of the 0% and reduced 3% interest rates, the individual must comply with her/his other tax obligations and, prior to the expiration of the zero-interest period, must enter into a payment plan with Revenue to pay the warehoused debt. The benefit of the warehouse scheme is conditional on the individual quantifying her/his tax debt through submission of all outstanding returns. If an individual fails to meet the conditions for debt warehousing – for example, if s/he fails to file a return or defaults on other taxes - the benefit of the 0% and 3 % interest rates will no longer apply and interest at a rate of 8% per annum will be re-imposed.
An information booklet giving full details of this scheme is available on the Revenue website.
Finally, Revenue adopts a pragmatic approach to businesses with genuine payment difficulties and has advised me that any business or tax agent who is struggling to meet their obligations should contact the relevant Revenue Branch Manager (via myEnquiries) to discuss the matter.
