Dáil Éireann Debate, Thursday - 16 June 2022
19. Deputy Colm Burke asked the Minister for Finance the current position pertaining to the Covid-19 related tax warehousing given the impact of rising costs on businesses; and if he will make a statement on the matter. [31254/22]
Amharc ar fhreagraThe Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic. Under the scheme, businesses can temporarily ‘park’ certain tax debts on an interest free basis until the end of this year (or until 30 April 2023 for businesses most impacted by the most recent public health restrictions and who are eligible for certain Covid-19 support schemes).
Debt warehousing allows for the deferral of the payment of VAT, PAYE (Employer) and certain self-assessed income tax labilities, and overpayments under the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS). It provides a vital liquidity support to businesses experiencing cash-flow and trading difficulties due to the COVID-19 pandemic.
As of 31 May 2022, €2.9 billion has been warehoused, comprised of €1,362 million in VAT, €1,371 million in Employers PAYE, €56 million in Income Tax, €53 million in TWSS overpayments and €37 million in EWSS overpayments.
Almost 90,000 individual entities are availing of Debt Warehousing, including 8,000 taxpayers who have warehoused €172 million under the recent extension to warehousing for certain businesses.
To retain the benefits of the scheme, it is essential that all tax returns are filed, even if the liability cannot be paid or there is no liability. This has been a key condition of the scheme since its commencement. In addition, current taxes must be paid as they fall due.
Recent reports indicate that Government supports, including the debt warehousing scheme, have so far prevented the level of business failures that would otherwise have been expected from trading restrictions. The ESRI estimated that the level of financial hardship would have been 72% higher without the €10 billion in wage subsidies paid by the Government during the pandemic. The CSO published data on rates of business survival in 2020-2021 which found that 84% of enterprises trading normally in 2019, employing 1.4 million people, had survived by the end of 2021.
