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Article Source: Warehouse extension 2022 (revenue.ie)

Overview

Warehousing of tax debt was aimed at assisting businesses who experienced cash-flow and trading difficulties during the COVID-19 pandemic.

Under the scheme, it was possible to defer paying some eligible tax liabilities until the business was in a position financially to deal with the debt.

Favourable interest rates applied to warehoused debt are as follows:

• 0% initially
• 3% from the start of Period 3 to the repayment date. 

Warehouse periods

The debt warehouse term is made up of three distinct periods.

Period 1

This is the period during which returns enter the warehouse.

This period was determined having regard to the restriction levels introduced by Government in response to the COVID-19 pandemic. 

Period 1 start date

The period began when the business first experienced cashflow trading difficulties due to COVID-19. This was:

• 1 January 2020 for Value-Added Tax (VAT)
• 1 February 2020 for Employers’ Income Tax (IT)
• after 26 March 2020 for Temporary Wage Subsidy Scheme (TWSS) overpayments
• after 1 September 2020 for Employment Wage Subsidy Scheme (EWSS) overpayments.

Period 1 end date

Period 1 ended on 31 December 2021.

All returns for qualifying taxes which fall in Period 1 will be entered into the warehouse.

Period 2

Period 2 is a one year period which runs from 1 January 2022 to 31 December 2022. No interest is applied to the warehoused debt during Period 2.

Period 3

Period 3 starts when Period 2 ends, that is, 1 January 2023. You have until 30 April 2024 to agree a Phased Payment Arrangement with Revenue for the warehoused debt. However, you can make interim payments towards your warehoused debt at any stage. Interest will be applied from the start of Period 3 until the final payment date at a rate of 3%.

Note

The Debt Warehousing Scheme (DWS) was extended for some businesses. For further information, please see the next page in this section. If you do not qualify for the extension, the above period dates apply.

Removal from warehouse

Failure to file returns may result in the entitlement to avail of the Debt Warehousing Scheme (DWS) being withdrawn.

Where warehousing is withdrawn, periods which had been warehoused:

• will become payable immediately
• may be subjected to debt collection enforcement action
• will be subject to interest charges of 8% or 10% per annum.  

In addition, your Tax Clearance Certificate (TCC) will be automatically rescinded. Consequently, any Government support payments or grant aid will cease until the compliance issues are rectified.

Disclosure of additional Period 1 liabilities

If you have any previously undeclared liabilities for Period 1 you can now declare these to Revenue. Any additional liabilities for Period 1, declared by 31 January 2023, can be included in the debt warehouse. These liabilities will benefit from the reduced interest rates available under the scheme. 

Period 1 ran from January 2020 to December 2021 or to 30 April 2022 if the warehouse extension applied.

If you are eligible you will be notified by a Level 1 compliance intervention notification during September 2022. A copy of this notice is available in Appendix 1 of the Level 1 Compliance Programme – Debt Warehousing Scheme.

Note

If you are satisfied that all your returns for Period 1 are correct no further action is required.

Benefits of making a disclosure

The benefits of making a disclosure of additional Period 1 liabilities are:  

• Zero interest is applied to the additional declared liability up until 31 December 2022 or 30 April 2023, where the extension applied. Thereafter, a reduced rate of 3% applies.
• You can enter into a Phased Payment Arrangement (PPA) for the additional declared liability or add it to your existing PPA
• and
• You have the assurance that, by making a Qualifying Disclosure, you are fully tax compliant. This means that you will not risk having any of your debt warehousing arrangements revoked.

Making an Unprompted Qualifying Disclosure

A qualifying disclosure is a disclosure of complete information that is:

• made in writing
• is signed by or on behalf of the taxpayer
• and
• must be accompanied by a declaration, to the best of your knowledge, information and belief that all matters contained in the disclosure are correct and complete.

You can submit a scanned copy of the signed disclosure through MyEnquiries in Revenue Online Service (ROS) or myAccount. If you submit the disclosure through ROS you should select ‘DWS Disclosure’ from the dropdown menu. If you submit the disclosure through myAccount you should refer to the term ‘DWS disclosure’ in your message.

You can also submit the disclosure to Revenue by post to the address shown on the Level 1 notification.

All disclosures must be received by Revenue on or before 31 January 2023.

Each disclosure will be checked and verified by Revenue. You will then be contacted by Revenue and requested to amend the relevant returns. 

In certain cases, Revenue may need to bring the liability to account by the raising of an assessment. Once the liability has been brought to account, you will be required to:

• pay the additional liability in full
• or
• agree that the additional liability will be paid by a PPA.

Once the payment terms are agreed, you will be notified in writing that your disclosure has been accepted by Revenue as qualifying.

Warehouse extension 2022

In December 2021, the Debt Warehousing Scheme (DWS) was extended for some businesses. The businesses must:

• already be eligible for warehousing
• and
• have a valid claim during the period from 1 January 2022 to 30 April 2022 for any of the following Government COVID-19 Support Schemes:
  • Employment Wage Subsidy Scheme
  • Covid Restrictions Support Scheme
  • other Government Covid-19 Support Schemes (details available in Section 4 of the  Information Booklet on Debt Warehousing).

For businesses who qualify for the extension, warehouse period dates extend as follows:

Period 1 end date

Period 1 ended on 30 April 2022. All returns for qualifying taxes which fall in Period 1, will be entered into the warehouse.

Period 2

Period 2 is a one-year period which runs from 1 May 2022 to 30 April 2023 in the case of customers entitled to the warehouse extension. No interest is applied to the warehoused debt during Period 2.

Period 3

Period 3 starts when Period 2 ends, that is, 1 May 2023. You have until 30 April  2024 to agree a Phased Payment Arrangement with Revenue for the warehoused debt. However, you can make interim payments towards your warehoused debt at any stage. Interest will be applied from the start of Period 3 until the final payment date at a rate of 3%.