Changes to Tax Debt Warehousing Scheme

Minister for Finance Michael McGrath has announced changes to the Tax Debt Warehousing Scheme.  Furthermore, the Revenue Commissioners have indicated that they will take a flexible approach to repayments which will allow for payback arrangements spanning more than five years.

The changes being confirmed include:

• The interest on the warehoused tax is being reduced to 0% (any business that paid interest already on warehoused tax will have it repaid)
• Revenue will adopt enhanced flexibilities including extending the repayment term beyond the standard 3-5 years on a case-by-case basis
• Revenue will work with individual businesses who encounter cash flow difficulties and will show as much flexibility as possible

Businesses must engage with Revenue before 1 May 2024 to draw up a plan to pay this money back, with a key condition that businesses continue to file their current tax returns and pay current liabilities as they fall due.

The announcement of the above is very welcome and will provide breathing space for many. The reality for some however is that this still may not provide the solution.

If you or your client is carrying unsustainable warehoused tax debt, a restructuring process such as SCARP or examinership should be considered. If you wish to find out more, please do not hesitate to contact our restructuring and insolvency team for a confidential consultation.