10/01/2022

10/01/2022

Debt Warehousing Scheme – End of “Period 1”

The debt warehousing scheme was quickly put together by Revenue back in the early days of the Covid pandemic and was a welcome boost to many businesses who could elect to “warehouse” Paye and Vat liabilities.  Originally the scheme was to cover the tax arising in the period while the business was closed plus an additional two months but for most businesses a welcome extension to the end of December 2021 had previously been announced. While some businesses are back trading and paying current VAT and Paye liabilities many businesses are still struggling from a cashflow perspective and are still availing of the debt warehouse scheme.  However, under the current rules of the scheme the ability to warehouse VAT and Paye liabilities is coming to an end. Paye and Vat liabilities arising in respect of returns from the 1st of January 2022 will now need to be paid along with the filing of the returns.  In addition, the warehoused debts arising pre-31 December 2021 are now entering “Period 2” of the scheme.  Period 2 runs from 1 January 2022 to 31 December 2022 and within this period any tax liabilities which have been warehoused will not be subject to interest. Business from early next year now the face the reality of having to pay current taxes while best deciding how to tackle prior VAT and Paye debt.  Cashflow considerations will be key and will no doubt be affected by again by Covid 19 in the new year. Perhaps we haven’t seen the last of tax debt warehousing……