Dáil Éireann Debate, Wednesday - 25 October 2023
68. Deputy Louise O'Reilly asked the Minister for Finance the amount of debt still warehoused under the tax debt warehousing scheme; the amount of this debt per division; and if he will make a statement on the matter. [46867/23]
View answer69. Deputy Louise O'Reilly asked the Minister for Finance the amount of tax revenue lost as a result of a company becoming insolvent that had tax debt warehoused under the tax debt warehousing scheme; the amount of tax revenue lost, in tabular form; to provide a breakdown, by amount of tax revenue lost per division; and if he will make a statement on the matter. [46868/23]
View answerI propose to take Questions Nos. 68 and 69 together.
The Tax Debt Warehousing Scheme has offered valuable and practical liquidity support to businesses during the COVID pandemic and continues to support businesses as they recover from the impacts of the pandemic and the current energy crisis. It has assisted businesses with their cash-flow during difficult trading periods, preventing business failure. The objective of this scheme is to allow firms help to recover thereby helping to guarantee their long-term economic viability and survival.
The scheme applied to VAT debts, PAYE (Employer) debts, certain self-assessed income tax debts and overpayments of both the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS).
The scheme allowed for the parking of the debt at 0 per cent interest up to 31 December 2022 (or 30 April 2023 for those in the extended scheme). A significantly reduced interest rate of 3 per cent, as opposed to the general interest rate of 10 per cent (or 8 per cent for income tax underpayments), applies from 1 January 2023 on the warehoused debt (or from 1 May 2023 for those in the extended scheme).
A significant extension to the scheme announced in October 2022 means that businesses have until 1 May 2024 to make arrangements to repay their warehoused debt. Importantly, businesses are still able to avail of the reduced 3 per cent interest rate from 1 January 2023 when they come to pay the debt.
I am advised by Revenue that the total debt eligible for the Debt Warehousing Scheme since its introduction is €31.9 billion, with over 250,000 businesses eligible to avail of the scheme. As at end-September 2023, almost 94% of that debt has been paid, leaving a balance of €1,872 million in the warehouse. In addition, 2,130 warehoused customers had, at end-September, agreed instalment arrangements for an aggregate warehoused debt of €113 million using Revenue’s flexible phased payment facility.
The value of debt warehoused at end-September 2023 is outlined below, broken down by Revenue Division.
|
Revenue Division |
€ Million* |
|
Business |
1,167 |
|
Medium Enterprises |
573 |
|
Large Corporates |
108 |
|
Personal |
19 |
|
Large cases – High Wealth individuals |
6 |
|
Total |
1,872 |
*Any variance in total figures is due to rounding
It remains a key condition of the Debt Warehousing Scheme that current liabilities are filed and paid on time. Revenue is actively engaging with businesses in the scheme to ensure they are complying with this key condition in order to retain the benefits of the scheme. Where payment difficulties arise, particularly in relation to current tax obligations, I am assured that Revenue will work proactively with businesses who engage early to resolve these payment difficulties. Revenue has a proven track record in agreeing flexible Phased Payment Arrangements to allow for the repayment of debt over a period of time.
Revenue have further advised that by end-September almost €74 million of debt previously warehoused by 716 businesses was lost due to those businesses becoming insolvent, a breakdown by Revenue Division is outlined below.
|
Revenue Division |
€ Million* |
|
Business |
€45.30 |
|
Medium Enterprises |
€21.66 |
|
Large Corporates |
€6.78 |
|
Personal |
€0.15 |
|
Total |
€73.89 |
*Any variance in total figures is due to rounding
Revenue’s expectation is that the extended timeline, to 1 May 2024, for entering into arrangements for repaying warehoused debt, together with flexible payment arrangements, will assist most businesses to work through any difficulties and will satisfactorily address the repayment of their tax debt, including any warehoused debt, over an acceptable period of time.
