No payments on €300m of ‘parked’ pandemic-related tax debt – Revenue

Some 12,000 businesses are not paying any taxes that built up during the Covid-19 pandemic and currently stand at €300 million, new figures from Revenue show.

Revenue has published figures showing the scale of pandemic-related tax being temporarily parked as businesses continue to recover from restrictions during the pandemic.

The Government has suspended the collection of pandemic debt to help businesses through disruption and closures during the public health crisis.

At the end of January, more than €3 billion in tax debt owed by almost 105,000 businesses was being “warehoused” under the Revenue’s debt warehousing scheme.

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Some 250,000 businesses were eligible to avail of the scheme under which they can warehouse certain pandemic-related tax debts on an interest-free basis until the end of 2022.

Businesses affected by public health restrictions introduced in December 2021 in response to the Omicron wave of infections can avail of an interest-free period until April 30th, 2023.

Of the eligible businesses, 59 per cent paid all their taxes in the month it was due or, having availed of the scheme, have since paid their tax debts in full.

A further 36 per cent have part-paid their warehoused debt and are continuing to avail of the scheme covering about €2.7 billion in debt.

The remaining 5 per cent, covering fewer than 12,000 businesses, continue to avail of the scheme for all of their pandemic-related tax debts, totalling €300 million.

Revenue said that almost €31 billion of tax debt was eligible for the scheme, which means that 90 per cent of the debt has been paid, including €23.1 billion in the month it was due and a further €4.9 billion paid the following month.

Revenue reminders

Collector General Joe Howley said Revenue would be writing to businesses over the coming days to remind them of the period for which their debt remains parked.

“Businesses that are able to, and that want to, can pay off some or all of their debt at any time in the intervening period,” he said.

“The data we have published today shows that many businesses are deciding to pay their warehoused tax debt as soon as they are in a position to do so.”

Mr Howley warned that businesses that do not continue to file current tax returns would lose the benefits of the scheme and the taxes would become due for payment immediately.

These businesses would also lose the zero-interest tax rate as well as the significantly reduced interest rate of 3 per cent on payments from the end of this year on warehoused debt.

“Businesses that have outstanding tax returns need to take action now to ensure they remain eligible for the scheme. Such businesses should file all outstanding returns by the end of April 2022,” said Mr Howley.

“Having tax returns fully up to date means all tax debt eligible for the debt warehousing scheme is quantified. But, most importantly, if outstanding returns are not filed, the business concerned will lose the benefits of the scheme.”

The State’s 14 sheriffs, who collect taxes on behalf of the Revenue and earn commissions based on the collections, have complained that the suspension of tax enforcement due to the pandemic is jeopardising their businesses.