Debt Warehousing Scheme – 2024 Update

April 9, 2024
|In Small Business
|By Angela O'Leary

Debt Warehousing was established during the Covid-19 pandemic and provided much needed and welcome relief to business owners operating during that time who were severely impacted by public health restrictive measures.

It allowed eligible tax payers to defer VAT and PAYE liabilities on an interest free basis for a limited time and thereafter, the interest rate went to 3%. More than 105,000 businesses availed of the scheme with more than €3 billion of debt being warehoused.

Debt Warehousing 2024 Update

Last month, in February 2024, the Minister for Finance Michael McGrath T.D. announced significant changes to the Tax Debt Warehousing scheme of a reduction in the interest rate applying to warehoused tax debt to 0%.

Commenting on the change to the scheme, the Minister said ‘this government is acutely aware of the ongoing cost pressures faced by businesses and is determined that viable businesses are given every chance to succeed in a challenging trading environment.”

A reprieve to the 57,500 businesses who welcome the additional space and time to address their liabilities. €1.72 billion remains outstanding. It was also announced that any interest paid by taxpayers under the scheme will be refunded.

Businesses availing of the Debt Warehousing scheme need to engage with Revenue prior to 1st May to avail of the flexible approach to tax debt warehousing.

Businesses have until 1 May 2024 to either:

  • pay their warehoused debt in full, if they can

or

  • engage with Revenue on addressing the debt, including arrangements for a Phased Payment Arrangement (PPA).

Businesses will be provided with every possible flexibility in managing the payment of their warehoused debt. This includes the level of down payment, if any, to commence the payment arrangement, an extended payment duration and the availability of payment breaks and payment deferral if temporary cash flow difficulties arise during the arrangement term.

It is essential that business owners keep up to date with revenue returns and pay the liabilities as they fall due. Failure to meet these conditions could mean you will be removed from the Debt Warehouse.

If you are unsure about these new flexible conditions, please get in touch with us here at AG Associates.