Business

Demands issued to almost 12,000 businesses with warehoused debt

Revenue Commissioners say terms of debt warehouse scheme, including 0% interest, will be extended to businesses that submit formal payment proposal before May 15th

More than 11,700 businesses have warehoused debt repayments outstanding, amounting to €130 million. Photograph: Laura Hutton

Jack White
Thu May 9 2024 - 19:40

More than 11,700 businesses have warehoused debt repayments outstanding, amounting to €130 million in total owed, according to the Revenue Commissioners.

The deadline for companies with warehoused debt to engage with the tax authority was May 1st, with Revenue strongly encouraging any business that receives a demand in the coming days to take action “immediately”.

On Thursday, it said it issued demands to 11,724 businesses with warehoused debt in excess of €500, requesting them to engage in formulating a payment plan within seven days.

More than 60 per cent (7,279) of those businesses have outstanding liabilities of less than €5,000, while a further 30 per cent (3,670) have outstanding liabilities between €5,000 and €50,000. The remaining 10 per cent of businesses (775) have warehoused debt over €50,000.

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The scheme was introduced at the height of the pandemic in 2020 to provide liquidity support to businesses, allowing them to defer paying various tax liabilities until their financial position returned to normal.

Those who do not engage within the next week will receive a final demand and the warehoused debt will immediately and automatically be subject to standard enforcement proceedings, Revenue said.

“The final demand notice will provide a seven-day notice before Revenue takes the appropriate enforcement action,” it said.

“This means that the 0 per cent interest rate and flexible payment options which apply in respect of warehoused debt will no longer be available.

“Revenue remains strongly committed to supporting viable businesses and it is Revenue’s clear preference, as has always been the case, to engage with businesses to agree mutually agreeable payment arrangements in place of the deployment of debt collection procedures,” it added.

The tax authority said a number of businesses have contacted Revenue in the last month but did not ultimately submit a formal phased payment proposal.

It said the terms of the debt warehouse scheme, including the 0 per cent interest, will be applied to payment plans for businesses which submit a formal phased payment proposal before May 15th.

“The demand period affords businesses a final opportunity to engage with Revenue on same, and Revenue will continue to engage on late payment proposals submitted during the relevant demand period,” Revenue said.

It acknowledged a “high level of engagement” from businesses and their agents throughout the duration of the debt warehouse scheme and, in particular, in the lead-up to the original May deadline.

Almost 90 per cent of the €1.65 billion debt that remained in the warehouse at the start of April 2024 is now either paid in full, secured under phased payment arrangements or included within a proposed phased payment arrangement which is in the process of being finalised.

“The balance of €200 million remaining within the warehouse has therefore reduced significantly from a peak of €3.2 billion in January 2022,” Revenue said.

Jack White

Jack White

Jack White is a reporter for The Irish Times

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