The Revenue Commissioners have indicated that over 11,700 firms have pending warehouse debt payments, totalling to a massive €130 million. A time limit up until May 1st was given to enterprises with warehouse debt to liaise with the tax officials. The authority strongly appeals for prompt response to any demand notices received in the next few days.
Revenue invoices were dispatched to 11,724 corporations with warehouse debt surpassing €500, asking for collaboration to develop repayment agreements within a week. Out of these businesses, more than 60 per cent (or 7,279 firms) have unpaid liabilities less than €5,000, and another 30 per cent (or 3,670 businesses) owe between €5,000 and €50,000. The final 10% (a total of 775 businesses) have warehouse debts exceeding €50,000.
The mechanism was brought forth amid the peak of the 2020 pandemic to aid businesses with liquidity by delaying the payment of several tax liabilities until a solid financial position was regained. Revenue cautioned that any company not responding within the stipulated week period would receive a final invoice, making the warehouse debt instantly and inevitably subject to typical enforcement proceedings.
The final notice will give a seven-day warning before Revenue initiates any proper enforcement actions. Furthermore, the tax officials stated that the zero per cent interest rate would not apply, and flexible repayment methods would not remain valid for warehouse debts.
Revenue is fully dedicated to backing sustainable businesses, and it greatly favours collaboratively deciding on feasible payment plans instead of resorting to the application of debt collection procedures. The tax authority had been contacted by several businesses in the previous month, but none of them officially submitted a structured payment plan. The stipulations of the debt warehouse scheme, including the zero per cent interest, will be applicable to all businesses that forward an official structured payment plan before May 15th.
Revenue has stated that the period of demand gives businesses a last chance to engage with them towards the close of the required period. They reassured that they will continue to interact with businesses regarding late payment proposals submitted within this crucial period. Revenue recognised a significant amount of interaction from businesses and their representatives throughout the duration of the debt warehouse scheme, especially as the original deadline in May approached.
Starting from April 2024, the majority – close to 90% – of the remaining €1.65 billion debt in the warehouse has been dealt with. This includes full repayments, incorporation into phase-wise payment plans or in the process of finalising such proposed structured plans. The remaining debt of €200 million in the warehouse has hence seen a drastic reduction, falling significantly from a high of €3.2 billion recorded in January 2022, according to Revenue.