Dáil Éireann Debate, Tuesday - 21 May 2024
84. Deputy Pádraig O'Sullivan asked the Minister for Finance for a sectoral breakdown of the number of businesses with warehoused debt that did not engage with the Revenue Commissioners before the 3 May deadline in terms of number of businesses and value of warehoused debt, in tabular form; and if he will make a statement on the matter. [22710/24]
View answerThe 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% interest rate on that debt. With effect from 15 May, Revenue’s systems were updated to automatically apply the standard interest rates of 8% and 10% 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 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 outstanding debt cases, including sectoral analysis. This will be published by 31 May 2024.
It is important to note that to retain the 0% 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.
