Thousands of agricultural businesses still warehousing their tax debts
More Ppas Arrangements 1,500 Progressing (ppas), Said And Payment Set Were Had Actively They Up Revenue 10,000 Week Last Phased
Taxpayers in the agriculture sector who availed of the tax debt warehousing scheme should engage immediately with the Office of the Revenue Commissioners to devise a payment plan covering their debt.
The scheme was introduced in May 2020 to support businesses as they recovered from the impacts of the covid pandemic and the cost-of-living crisis. It allowed businesses to temporarily defer VAT, employer PAYE, certain self-assessed income tax liabilities, and wage subsidy scheme and employment wage subsidy scheme over-payments, on an interest-free basis up to the end of 2022, or until the end of April 2023 for those availing of the extended scheme.
After this time, a 3% interest rate applies until the debt is either fully repaid or the customer otherwise exits the warehouse.
Taxpayers are not required to pay all of their warehoused debt by May 1, 2024, if their cash flow difficulties affect their ability to meet ongoing tax obligations. However, in order to avail of the interest-free and flexible payment options, they must engage with Revenue.
Revenue said last week they had set up more than 10,000 phased payment arrangements (PPAs), and were actively progressing 1,500 PPAs. In the previous three days, Revenue had processed over €65m in payments for warehouse debt.
"We estimate that, when PPA applications on hand are finalised, and incoming payments on the Revenue Online Service are processed, 85% of the €1.65bn of debt that was warehoused at the start of April will either have been paid in full or secured under PPAs", said a press statement.
"For those businesses who have not yet put arrangements in place to pay their warehoused debt, either in full or as part of a PPA, they now risk losing the 0% interest rate and flexible payment options available in respect of their warehoused debt, which will become subject to standard debt collection.
Taxpayers can engage with Revenue via MyEnquiries or ROS.
"As of April 22, 2024, Revenue advised that there were 2,876 customers from the agriculture, forestry and fishing sector availing of the debt warehouse, with aggregated debt of €15.8 million", said Agriculture Minister Charlie McConalogue last week in the Dáil, responding to TDs who said farmers and forestry and agricultural contractors had been severely impacted by bad weather since last September and faced huge cash flow difficulties, coinciding with the warehoused tax debt deadline of May 1, 2024.
The Minister said: "Revenue has a proven successful track record in supporting businesses with cash flow difficulties, by agreeing flexible phased payment arrangements that take account of the financial circumstances of each business and their capacity to pay."
He said lower down payments, and a payment break, may be appropriate to alleviate the temporary cash flow difficulty for "seasonal" businesses. Such options can be considered on a case-by-case basis, once the businesses engage with Revenue and submit their payment proposals.
At the end of last March, about 70% of revenue customers with debts in the warehouse owed amounts less than €5,000. The bulk of the debt (€1.41bn) was warehoused by 5,040 customers with outstanding balances greater than €50,000.
