The Debt Warehousing Scheme provided a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic
Revenue has announced a 12 month extension to the Debt Warehousing Scheme to support businesses due to what it called the current challenging economic situation for companies.
Under the scheme, businesses with warehoused debt were due to enter into an arrangement with Revenue to deal with that debt by the end of the year – or by May 1, 2023 for those subject to an extended deadline.
But given the current economic uncertainty, Revenue said it was now extending that timeline to May 1, 2024.
Revenue said this means that businesses will not be faced with the challenge of either clearing the debt in the warehouse or entering into a phased payment arrangement to clear the debt until May 1, 2024.
It also said that businesses will still be able to avail of the reduced 3% interest rate from January 2023, as opposed to the general interest rate of 10%, when they come to pay the debt.
The Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic.
Statistics published by Revenue today show that the bulk of the €2.58 billion warehoused debt – €2.2 billion – is warehoused by 7,500 taxpayers and almost 50,000 taxpayers have debts of less than €5,000 warehoused.
Revenue said it will write to all businesses with debt in the warehouse in early December setting out their statement of debt and advising them of the extension announced today.
Collector-General Joe Howley said that Revenue appreciates the very significant challenges that businesses are currently experiencing in meeting their tax obligations, due to the energy costs crisis and the financial pressures this has placed on businesses as they continue their recovery from the pandemic.
“This extended deadline in terms of debt remaining in the warehouse, and the ongoing availability of the reduced rate of interest of 3%, will provide businesses with greater certainty in the current economic climate and give them additional time before they have to start addressing the warehoused tax debt,” Mr Howley said.
“Where a business has the capacity to repay any or all of the debt warehoused in the meantime, then they can of course do so,” he added.
Mr Howley also said the Debt Warehousing Scheme has provided a valuable support for businesses and, at its height, over €3.1 billion in debt was warehoused.
“The extension announced today will give businesses some certainty as they head into the end of 2022 and plan for 2023 and reflects Revenue’s willingness to work with businesses to deal with the challenging economic and business environment in which they are currently operating,” he added.