Debt Warehousing - Revenue Letters

Revenue contacted all businesses last week who availed of the Debt Warehousing Scheme to remind them that they must continue to file all of their current tax returns in order to continue to enjoy the benefits of Debt Warehousing.

For those businesses who have filed their returns the letters will state the amount of debt currently warehoused and the taxes it relates to.

It will also serve as a reminder that Revenue will be in contact before the end of 2022 to discuss an appropriate repayment plan for those taxes, commencing in 2023.

For those businesses who have tax returns currently outstanding their letter will list the tax returns that need to be filed.

The letter will give them a deadline of 30 April 2022 to get their affairs in order or face exclusion from the scheme entirely i.e. the warehoused debt will become payable immediately and the reduced 0% and 3% interest rates will be unavailable.

Revenue have said that they will take a flexible and pragmatic approach to payment arrangements to enable businesses to pay the debt due during Period 3 but also stated that write offs will not be considered.

Contact Us

If you would like to know more about Debt Warehousing or would like assistance in negotiating a payment plan with Revenue or getting outstanding returns filed, please contact our Tax Team.

  • Mike Scanlan, Senior Tax Manager, (090) 6480600
  • Jackie Masterson, Head of Tax, (090) 6480600

About Debt Warehousing

The Debt Warehousing Scheme was a key cornerstones of the response from Government to assist businesses who had to cease or severely restrict their trading due to public health restrictions during the COVID-19 pandemic.

The scheme allowed for the deferral of certain unpaid taxes arising from the COVID-19 crisis for a period of 12 months after a business resumed trading and the application of a lower interest rate of 3% per annum on the repayment of such warehoused tax debts after that date.

There are 3 periods to be aware of under the scheme:

  • Period 1 – restricted trading phase where eligible businesses could continue to warehouse tax debt 
  • Period 2 – the zero interest phase where no further tax debt can be warehoused but no interest is being charged on the outstanding debt 
  • Period 3 – eligible businesses commence repaying the debt and can avail of a reduced interest rate of 3%

Period 1 ended on 31 December 2021 for the majority of businesses in the Debt Warehousing Scheme. Period 2 began on 1 January 2022 and will end on 31 December 2022.

Certain businesses (in particular those in the hospitality/entertainment industries) can avail of an extension to Period 1 until 30 April 2022. Period 2 for these businesses will begin on 1 May 2022 and end on 30 April 2023.

Businesses must engage with Revenue before Period 2 ends to outline their plans to pay the warehoused debt. Interest at a rate of 3% will apply to debt during Period 3 until the debt is paid off.

The taxes covered by this arrangement for qualifying businesses include:

  • VAT 
  • PAYE (Employer) taxes 
  • Income Tax

The scheme was also expanded to include any overpayment of the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS) due to be repaid to Revenue.

Click here for more detail about the Debt Warehousing Scheme.