Income Tax Debt Warehousing – Can you avail of it?

The online income tax filing deadline for the year ended 31 December 2019 was recently extended to the 10th of December.  Payments to cover the balance of income tax due for 2019 and preliminary tax for 2020 are also due to be lodged with Revenue by the 10th of December. 

Unfortunately, the most self-assessed tax payer will have seen their incomes eroded in 2020 and cashflow is of critical importance in keeping a business open.  With this in mind taxpayers should consider whether they can avail of the income tax debt warehousing scheme introduced by Revenue.   

In order to qualify for the scheme, the taxpayer must make a declaration to Revenue stating that their total income for 2020 is expected to be at least 25% less than the total income for 2019. 

Once the taxpayer qualifies for debt warehousing the following applies: 

  • For customers filing on Ros an interest charge will not be levied on any outstanding taxes from the 10th of December 2020 to the 9th of December 2021. 
  • Any taxes outstanding at the 10th of December 2021 will be subject to a reduced interest rate of 3% until the tax is paid.   

If a taxpayer has outstanding debts at the 10th of December 2021 it is important that they contact Revenue before this date to agree a repayment plan in respect of the debt. 

To qualify for the scheme, it is important that the taxpayer continues to file all their tax returns in a timely fashion.  Tax clearance will not be affected if the warehouse scheme is availed of. 

If you have any queries regarding the scheme or wish to avail of the scheme please contact either Gordon, Gerry, Eamonn or Gillian in the tax team.