At least €100 million in warehoused debt from a scheme introduced to help businesses during the height of the Covid-19 pandemic is not recoverable, Revenue has said.
The Debt Warehousing Scheme, which included a 0 per cent interest rate, was introduced in 2020 to provide liquidity support to businesses, allowing them to defer paying various tax liabilities until their financial position returned to normal.
Some €3 billion of the €3.2 billion included in the warehouse at its peak in January 2022 has now been either settled or secured under a phased payment arrangement, Revenue said on Tuesday.
Still, just over 7,000 businesses that availed of the scheme “failed to engage meaningfully” with Revenue to address their warehoused debt in advance of the key deadline of May 1st, 2024, and were subsequently removed from the warehouse.
In response to queries, Revenue said these 7,000 businesses had warehoused debt totalling €100 million at that time. Once removed from the warehouse, this debt was subject to interest at the relevant rates of 8 per cent or 10 per cent, as appropriate.
“In the interim period, some of the debt owed by these businesses has now been repaid, whilst some has been determined as uncollectable,” said a Revenue spokeswoman.
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She said the €200 million of warehoused debt which has not been settled or secured as of December 31st includes the outstanding debt from these 7,000 businesses, but she could not provide a breakdown of how much of the €100 million owed by those businesses in May has since been collected.
However, the remainder — some €100 million — was deemed “uncollectable”. She said debts may have been determined to have been uncollectable due to reasons such as liquidation, examinership, bankruptcy and cessation of trading.
Revenue’s enforcement options include the courts and sheriff referrals. Where the tax debt cannot be collected through these methods, it may consider pursuing the liquidation of the company and making the relevant applications to the High Court.
Of the €1.1 billion warehoused debt which is being repaid, €120 million is owed by 8,262 taxpayers with warehoused debt less than or equal to €50,000. The remaining €940 million is owed by 3,381 taxpayers with warehoused debt greater than €50,000.
Separately, Revenue said unpaid taxes of €1.8 billion remain available for collection outside the warehousing scheme.
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