A total of 510 companies that were eligible for the Revenue Commissioners’ Covid tax debt warehousing scheme have been liquidated with total tax debt of just over €55 million.
New figures provided by the Minister for Finance Michael McGrath show that of the €55 million tax debt, €50 million had been warehoused.
In relation to the €50 million warehoused tax debt from the liquidated firms, Mr McGrath said that “Revenue is not in a position to say exactly how much tax will be foregone in the future due to liquidations or administrations”.
In a written Dáil reply to Sinn Féin TD Louise O’Reilly concerning the overall operation of the scheme, Mr McGrath said that at the end of February this year, almost 93 per cent of the €31.9 billion tax debt that was eligible for warehousing had been paid, leaving a balance of €2.25 billion in the “warehouse” for almost 65,000 individual entities.
The €2.25 billion in warehoused debt at the end of February was comprised of €1.36 billion in the Revenue Business division, €639 million in Medium Enterprise, €227 million in ‘Large Corporates’; €21 million in ‘Personal’ and €6 million in High Wealth individuals who have net assets of more than €20 million.
The debt warehousing scheme allowed for the deferral of the payment of VAT, employer PAYE and certain self-assessed income tax liabilities, including Covid-19 wage support overpayments.
Mr McGrath said that “it has provided a vital liquidity support to businesses during the Covid pandemic”.
The Minister said a significant extension to the scheme was announced last October, with the commencement date for repayment of the debt extended to May 1st, 2024 from the original repayment date of January 1st, 2023.
He said Revenue expects that the extended timeline for entering into arrangements for repaying warehoused debt, together with flexible payment arrangements, “will assist most businesses to work through any difficulties and will satisfactorily address the repayment of their tax debt, including any warehoused debt, over an acceptable period of time”.
“Importantly also, businesses are still able to avail of the reduced 3 per cent interest rate from January 1st this year, as opposed to the general interest rate of 10% when they come to pay the debt,” he said, adding that it “remains a key condition of the debt warehousing scheme that current liabilities are filed and paid on time.”