Taxpayers who have availed of the Debt Warehousing Scheme (DWS) have until 1 May next to engage with Revenue to ensure that they remain eligible to avail of the scheme.
What is DWS?
The DWS was established at the start of the pandemic and it allowed taxpayers to defer payment of taxes until activity levels returned to some level of normality.
Under the DWS taxpayers could defer the payment of certain taxes and avail of lower interest charges in the warehoused debt. Last February it was announced that the interest rate applicable to warehoused debt was reduced to 0%. Where a taxpayer has already paid warehoused debt which was subject to interest at 3%, it will get a refund of that interest.
What’s happening now?
In recent weeks Revenue have written to taxpayers to highlight the need to take action by 1st May 2024 in order to continue to avail of the benefits of the DWS.
Taxpayers availing of the DWS have until 1st May 2024 to either:
- pay their warehoused debt in full, if they can, or
- engage with Revenue on addressing the debt, including arrangements for a Phased Payment Arrangement (PPA).
In the absence of engagement, warehoused debt will be subject to immediate collection after 1 May and possible enforcement, with the standard interest rates of 8%/10% applying to all debt. This can be avoided if you engage now and agree a plan to address the warehoused debt before 1 May.
Next steps
Revenue’s letter to taxpayers recommends starting the application process on the Revenue Online Service (ROS) well in advance of 1 May 2024 to allow time to mutually agree the optimal payment plan to suit the taxpayer’s individual circumstances.
Continued compliance
To continue to avail of the DWS, taxpayers must continue to file their current tax returns and pay current taxes as they fall due. This has always been Revenue’s requirement for eligibility to the DWS.
The consequence of not meeting these conditions is that the warehouse facility is revoked, which will result in the standard interest rate of 10%/8% applying, backdated to when the debt arose, and the immediate enforcement of all outstanding debt, including interest.
If you have any queries in relation to the Debt Warehousing Scheme or your obligations under it please don’t hesitate to contact your DHKN representative or email us at info@dhkn.ie.
