Through the gloomy cost of living crisis exacerbated by rising energy costs, comes a glimmer of hope from Revenue with regards to the Debt Warehousing Scheme. Only yesterday, Revenue have announced that they will be extending their much-utilized Debt Warehousing Scheme for at least a further 12 months. This will be especially helpful to businesses who were facing financial uncertainty amid the end of year deadline (for those who could not avail of an extension) to either clear the debt warehoused or enter into an arrangement with Revenue. This will give businesses an extra year to plan and to strategize, alongside their financial advisors as to how best to settle their existing debt and prepare for a payment arrangement if required.
This means that all businesses will now defer their responsibility to either clear the debt in the warehouse or enter into a phased payment arrangement to clear the debt until 1 May 2024. This 1 May 2024 date appears to apply to all businesses with warehoused taxes – even the business who were due to seek arrangements with Revenue by 1 January 2023.
Revenues announcement suggests that interest on the outstanding taxes will accrue from 1 January 2023 (or 1 May 2023 for those qualified for the extension) at a rate of 3% per annum. So, this extension announced by Revenue will have an associated cost – however the 3% rate is substantially less than the normal Revenue interest rate of 10%. Of course, if businesses have planned to clear their debt with Revenue by the end of the year and are in a position to , they can do so but are under no obligation to repay the debt until May 2024.
Businesses who have warehoused debt should expect correspondence over the coming months from Revenue outlining their statement of debt and also advising on the extension that has been put in place. If you have any queries either today or when you receive the correspondence, please contact dave.obrien@quintas.ie or your contact in Quintas, who would be more than happy to assist.
