Business

Revenue signals ‘total flexibility’ on payment for warehoused pandemic tax debt

Some 58,000 businesses with outstanding debt of €1.75bn are to make repayment arrangements

Revenue chairman Niall Cody told the Public Accounts Committee businesses must keep current taxes paid. Photograph: Eric Luke

Cormac McQuinn
Thu Jan 25 2024 - 16:50

Revenue officials reassured businesses whose pandemic-era tax debt has been warehoused that there will be “total flexibility” on arrangements to pay it off.

Under the current terms of the tax debt warehousing scheme, about 58,000 businesses with outstanding debt totalling some €1.75 billion are to make repayment arrangements by May 1st.

There has been concern in some sectors, particularly hospitality, at the looming deadline.

Minister for Finance Michael McGrath last week said the Government would bring in flexibilities and was considering issues such as the duration of repayment schedules and the date such arrangements must be entered into.

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Prior to any changes to the scheme, Revenue chairman Niall Cody told the Dáil’s Public Accounts Committee (PAC) his key message is that affected businesses need to keep their current taxes paid.

He said this proved they were viable and added: “We will make appropriate, tailored arrangements for businesses to clear the warehouse over the period that’s necessary for them to keep their current [taxes] up to date and having regard to their financial position.”

Earlier, Mr Cody outlined how debt warehousing was introduced in May 2020 to provide “vital” support for businesses whose trading had been restricted by public-health measures brought in as a result of the Covid-19 pandemic.

He said the balance “in the warehouse” peaked in January 2022 at €3.2 billion and at the end of 2023 it stood at €1.75 billion.

The PAC was told that almost 40,000, or 70 per cent, of those availing of the scheme have warehoused debt of €1,000 or less.

In response to questions from Fianna Fáil TD Cormac Devlin, Mr Cody emphasised the importance of businesses with warehoused debt keeping up to date with their current taxes and engaging with Revenue on repayment arrangements.

He dismissed suggestions that businesses would have to make down-payments of 25 per cent or 40 per cent.

Collector general Joe Howley said: “There’ll be total flexibility on the payment arrangements.”

He added: “We don’t need a down-payment. All we need is as little as €1 to set up the system in our IT system”.

Mr Howley said that in recent months Revenue had been engaging with about 5,400 cases where the debts were in excess of €50,000 and “and we’ve got full co-operation there”.

He said: “The time to start setting up payment arrangements hasn’t arrived yet, so the level of payment arrangement set up so far is low but we suspect that will increase substantially as this year continues.”

Cormac McQuinn

Cormac McQuinn

Cormac McQuinn is a Political Correspondent at The Irish Times

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