The Minister for Finance has announced a significant change to the Tax Debt Warehousing Scheme that could provide much-needed relief for small businesses across the country.

The interest rate on warehoused tax debt has been reduced to 0%.

Introduced in response to the Covid-19 pandemic, the scheme was designed to assist businesses experiencing cash flow issues by allowing them to defer certain tax liabilities.

In a move that will be welcomed by many, Revenue has confirmed that businesses who have already paid warehoused debt, which was subject to interest at 3%, will receive a refund of that interest. Furthermore, businesses will have the opportunity to extend the duration of payment arrangements beyond the typical three to five-year duration on a case-by-case basis, and an initial down payment may not always be required.

The necessary legislation to implement the tax reduction is being brought forward, with Revenue set to implement the 0% interest rate on an administrative basis in the meantime.

However, businesses availing of the Tax Debt Warehousing scheme must engage with Revenue before 1st May to either pay their warehoused debt in full or discuss a separate payment plan. They must also file their current tax returns on time and meet their current tax liabilities as they fall due.

This is a significant development for small businesses in Ireland, and we encourage all our clients to take advantage of this opportunity. As always, we’re here to help you navigate these changes and ensure the viability of your business into the future.