Some €74 million of debt warehoused during the pandemic has been lost, as 716 businesses that availed of the warehousing scheme have since become insolvent.
Sinn Féin TD and spokeswoman on enterprise Louise O’Reilly has warned that recovering money still owed under the tax debt warehousing scheme “will be a balancing act” to ensure money owed is recovered without putting smaller businesses at risk.
The Tax Debt Warehousing Scheme offered to businesses during the pandemic allowed for the warehousing of certain debts first at 0 per cent interest, and later at a reduced interest rate of 3 per cent.
An extension of the scheme announced in October of last year gave businesses until next May to make arrangements to repay their warehoused debt.
The total debt eligible for the scheme since its introduction is €31.9 billion, with more than 250,000 businesses eligible to avail of the support.
In answer to a parliamentary question submitted by Deputy O’Reilly, Minister for Finance Michael McGrath confirmed that as at the end of September, almost 94 per cent of that debt has been repaid, leaving €1.87 billion still warehoused through the scheme.
This includes the majority, €1.17 billion, owed by businesses, while €573 million is owed by medium enterprises, and €108 million is owed by large corporates.
Personal debts account for €19 million warehoused through the scheme, while large cases of high wealth individuals account for a further €6 million.
Of those who still owe debts through the scheme, 2,130 have made arrangements to make repayments using Revenue’s flexible phased payment facility, accounting for €113 million of the remaining warehoused debt.
By the end of September almost €74 million of debt previously warehoused by 716 businesses was lost due to those businesses becoming insolvent.
Deputy O’Reilly said that next year will be a “crunch year” for those with warehoused debt, as repayments commence.
She urged Revenue to approach repayment in a manner that ensures all money owed is repaid “but that does not push companies towards liquidation where there are viable alternatives”.
In his written response, Minister McGrath said that it remains a “key condition” of the scheme that all 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,” he said.
