Over €1.6bn in tax warehouse, as May deadline looms

The amount has barely changed since the end of January, with over 55,000 companies still to make repayment plans

Finance Minister Michael McGrath. Photo: Getty

John Burns

With less than two weeks to go to the May 1 deadline to sort out warehoused tax debt, only 2,760 companies have agreed repayment plans with the Revenue Commissioners.

The figure was revealed by Finance Minister Michael McGrath as he encouraged businesses to make arrangements with Revenue to address their liabilities.

A total of €1.65bn remains in the debt warehouse in respect of 55,490 taxpayers. The amount has barely shifted since the end of January, when it was €1.72bn.

Of the taxpayers with debt, 70pc have outstanding liabilities of less than €5,000. Most of the debt – €1.41bn – is warehoused by 5,040 firms who have outstanding balances greater than €50,000.

They have until May 1 to either pay off the debt or make an arrangement with Revenue to pay it off over an agreed period of time, known as a Phased Payment Agreement (PPA).

Mr McGrath said the 2,760 businesses that had agreed PPAs with Revenue at the end of March had €237m in debt.

“The reducing amount of debt in the warehouse and the associated number of customers involved demonstrates that businesses are working with Revenue to pay the amounts due,” Mr McGrath said.

“However, the liabilities of over 55,000 customers remain in the warehouse.”

Mr McGrath noted that Revenue has been taking a flexible approach in working with customers, and giving them support to manage their liabilities over a timeline that suits their circumstances.

He said Revenue would continue to do so, provided that businesses met the conditions of the scheme, which include continuing to file their current tax returns and pay liabilities as they fall due.

The tax-debt warehousing scheme was introduced in 2020 to help firms stay afloat during the pandemic. The scheme applied to Vat debts, payments due under PAYE, and some self-assessed income tax.

In February, the minister announced that the 3pc interest rate that had been applied to warehouse tax debt was being reduced to 0pc. Revenue has said it will operate this reduced rate on an administrative basis until a necessary change to the law is made. It also agreed to refund interest previously paid at 3pc.

In order to avail of the 0pc rate, and flexible payment options, companies are required to engage with Revenue to pay the debt over an agreed period.

Revenue has said that unless a PPA is in place, the full debt will be subject to “immediate collection” and “possible enforcement” while the standard interest rates of 8-10pc will apply.