Dáil Éireann Debate, Tuesday - 21 May 2024
220. Deputy Louise O'Reilly asked the Minister for Finance further to Parliamentary Question No. 237 of 14 April 2024, how many companies had failed to engage with the Revenue Commissioners as of 15 May 2024 under the debt warehousing scheme; the total tax debt owed by this cohort; the breakdown of this information, by division and by NACE economic sector, in tabular form; and if he will make a statement on the matter. [22723/24]
View answer225. Deputy Bernard J. Durkan asked the Minister for Finance to indicate the breakdown of phased payment arrangements entered into by the Revenue Commissioners as part of its debt warehousing scheme, by number of years for each industry, in tabular form; and if he will make a statement on the matter. [22807/24]
View answerI propose to take Questions Nos. 220 and 225 together.
The Tax Debt Warehousing Scheme was introduced in May 2020 to provide a vital liquidity support to businesses impacted by Covid-19 trading restrictions. The scheme allowed businesses to temporarily ‘park’ eligible taxes, on an interest-free basis, until 1 May 2024. At its peak in January 2022, there was €3.2 billion debt in the warehouse, the vast majority of which related to VAT and payroll taxes deducted by employers from their employees.
The scheme has now ended. Over 11,000 customers, with debt balances greater than €500, had not engaged with Revenue to address their warehoused debt by 1 May. Customers who had not engaged with Revenue to address their warehoused debt received a demand notice on 8 May 2024 giving one final opportunity to address their debt and avail of the 0 per cent interest rate on that debt. With effect from 15 May, Revenue’s systems were updated to automatically apply the standard interest rates of 8 per cent and 10 per cent on any outstanding warehoused debt. The next step for those who haven’t engaged on foot of the demand notice is that Revenue will start its collection process. Final demands are now issuing, giving seven days’ notice of enforcement action, unless there is immediate engagement by the taxpayer.
Revenue has confirmed to me it is currently working through several hundred applications for Phased Payment Arrangements (PPAs) that have been received over the last two weeks. When this process is complete, Revenue will conduct a full analysis of the PPAs agreed and the outstanding debt cases, including Divisional and Sectoral analysis. This will be published by 31 May 2024.
However, in relation to Deputy Durkan's request for the breakdown of PPAs by numbers of years for each industry sector, Revenue have indicated that it will not be possible to provide details of the PPAs agreed by number of years for each industry sector. However, the analysis is expected to provide the number of PPAs agreed by industry sector and will include the number of PPAs agreed by number of years.
It is important to note that to retain the 0 per cent interest rate in an agreed PPA, it remains a key condition that current taxes are filed and paid as they fall due, and that all monthly PPA instalments are honoured as agreed. Any taxpayer experiencing temporary cashflow difficulties that impact on their ability to meet their tax obligations on a timely basis, including scheduled monthly payments, should engage with Revenue at the earliest opportunity. Revenue will always work with viable businesses to agree mutually acceptable payment solutions, such as a payment deferral or a payment break, rather than deploying debt collection and enforcement options.
Finally, I wish to acknowledge the significant levels of engagement by taxpayers and their agents in addressing their warehoused debt in the run-up to 1 May 2024. I also wish to acknowledge the work of the Collector General’s Division in Revenue and the success of the scheme in supporting viable businesses and employments during an unprecedented and exceptionally difficult trading environment for businesses caused by the Covid-19 pandemic.
