Update on Revenue Debt Warehousing
by Dave O'Brien
 
 

In July we published an article on warehousing Revenue debt. Subsequently Revenue have issued updated guidance on this. Revenues packages can be split simply into 2:

  • Covid Related Debt
  • Non Covid Related Debt

Covid Related Debt

 

Businesses are allowed to warehouse VAT and PAYE liabilities for the period where trade is restricted due to Covid and for two months after returning to normal trading. For most companies restricted trading will cease by 30 June, therefore the debt warehousing will cease for most by the end of August. If you are looking to extend the debt warehousing beyond 31 August it is essential you engage with Revenue.

 

It is important that companies have filed returns for the periods being warehoused as if they don’t Revenue may not grant the warehousing. Warehousing is automatic for businesses whose turnover is less than €3m. For businesses with a turnover of over €3m they need to formally request the warehousing. If your business has not contacted Revenue with regard to this you should do so straight away.

 

The debt will be warehoused for 12 months after the cessation of the debt warehousing period. For most, the 12 months will cease on 31 August 2021. No interest will be charged on this debt if paid within the 12 months. If entering into an instalment arrangement after the 12-month period ends then a lower interest rate of 3% will be charged.

 

Non Covid Related Debt

 

This is any debt you may have had with Revenue pre-March 2020 and also any 2019 liabilities, be they income tax or Corporation tax where returns are now being filed.

 

Revenue here are allowing a 3% interest charge where one enters into a payment plan with Revenue before 30 September 2020. Note that the 3% rate applies to interest charged from the date of entering into the plan. Any interest pre the date of entering into the payment plan will still be charged at the 8%-10% rates. The 3% rate can only apply to declared liabilities with Revenue.

 

Revenue has given no indication as to whether they will extend this 30 September deadline. Agreeing a settlement with Revenue and a payment plan with the Collector General is time consuming and cannot done overnight so some extension to this timeframe would be most welcome.

 

If you are already in an existing payment plan with Revenue then the 3% interest rate will automatically apply to the balance of the debt that was outstanding as at 1 August 2020.