Debt Warehousing timeline extended to May 2024, and 3% interest remains
Businesses with warehoused debt were due to enter into an arrangement with Revenue by year end, or May 2023 in limited cases. Given the current economic uncertainty, Revenue say they are now extending that timeline to May 1, 2024.
This means that businesses will not have to clear the debt in the warehouse, or enter into a phased payment arrangement to clear it, until May 1, 2024. Revenue also said businesses will still be able to avail of the reduced 3% interest rate from Jan 2023, as opposed to the general rate of 10%.
This announcement will be a huge relief for many SMEs, says Paul O’Donovan, as businesses are currently trying to ride out a perfect storm of inflation and energy costs, as well as recovering from the pandemic. “Now is the time to get your cash flow management in place and put your budget projections together for 2023.”
The Debt Warehousing Scheme provided liquidity support to businesses suffering a downturn that was due to the Covid-19 pandemic. The bulk of the €2.58 billion warehoused debt, €2.2bn, is warehoused by 7,500 taxpayers and almost 50,000 taxpayers have debts of less than €5,000 warehoused.
While these changes to do not appear to have been updated on the Revenue website yet, Revenue announced on Tuesday 18-Oct-22 they will write to all businesses with debt in the warehouse in early December. This will set out their statement of debt and advise 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. “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.”
Read more in this piece from RTE business news – https://www.rte.ie/news/business/2022/1017/1329730-debt-warehousing-sche