Debt Warehousing Scheme Update
The Minister for Finance, Michael McGrath T.D., has announced that the interest rate applicable to warehoused debt will be reduced to 0%. Revenue has confirmed that it will operate the reduced interest rate on an administrative basis pending the legislative change. Revenue have also confirmed that, where a business has already paid warehoused debt which was subject to interest at 3%, it will get a refund of that interest.
Businesses availing of the Debt Warehousing Scheme have until 01 May 2024 to either pay their warehoused debt in full, if they can, or engage with Revenue on addressing the debt, including arrangements for a Phased Payment Arrangement (PPA).
Revenue have indicated that each PPA application is considered on a case-by-case basis. Taxpayers who wish to avail of a PPA may have to provide Revenue with a suite of information such as the most recent statutory financial statements, management accounts or budgets and should have this information to hand in advance of making a PPA application.
It remains a key condition of the Debt Warehousing Scheme that businesses continue to file their current tax returns and pay current liabilities as they fall due. By remaining in the Debt Warehousing Scheme, businesses will benefit from the 0% interest rate and flexible payment options available in respect of warehoused debt.
The consequence of not meeting these conditions is that the warehouse facility is revoked, which will result in the standard interest rate of 10% applying, backdated to when the debt arose, and the immediate enforcement of all outstanding debt, including interest.
If you have any questions or concerns regarding Debt Warehousing and your business please contact Padraig.
Email: pambrose@nkc.ie
Phone: 01 6754382