Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 237, 238, 239, 240 and 241 together.

The Tax Debt Warehousing Scheme was introduced in May 2020 to provide a vital liquidity support to businesses impacted by Covid-19 trading restrictions. The scheme allowed businesses to temporarily ‘park’ eligible taxes on an interest-free basis. After the interest-free period, a low interest rate of 3per cent was to be applied, however, in February 2024, I announced the reduction of the interest rate applicable to warehoused debt to 0 per cent. Businesses had until 1 May 2024 to engage with Revenue to put a plan in place to address their warehoused debt.

At the peak of the Scheme in January 2022, there was €3.2 billion debt warehoused for 105,000 customers. By the start of April 2024, the balance in the warehouse had reduced to €1.65 billion, with the significant majority of this reduction due to payments by businesses.

Revenue acknowledges the very high level of engagement from businesses and their agents in the lead up to the 1 May deadline. As at 9 May 2024, 94 per cent of the peak warehouse debt of €3.2 billion is now either paid in full, secured under Phased Payment Arrangements (PPAs) or included in a proposed PPA in the process of being finalised. The balance outstanding is €199 million, which represents a substantial reduction from the €3.2 billion that was warehoused in January 2022.

The Scheme ended on 30 April 2024, with the debt becoming due for payment on 1 May 2024. Therefore tax debt is no longer warehoused after this date. A total of 11,724 customers, with debt balances greater than €500, had not engaged with Revenue to address their warehoused debt by 1 May. Over 60 per cent (7,279) of those businesses have outstanding liabilities of less than €5,000 and a further 30 per cent (3,670) have outstanding liabilities between €5,000 and €50,000. The remaining 10 per cent of businesses (775) have outstanding liabilities in excess of €50,000, amounting to €130 million.

Revenue has confirmed that on 8 May, these customers received a 7-day demand notice giving one final opportunity to engage to address their warehoused debt and retain the 0 per cent interest rate on that debt. If there is continued non-engagement after the 7-day demand period, the debt will be subject to standard collection and enforcement at the full interest rates of 8/10 per cent.

Revenue has advised that a full analysis of the outstanding warehoused debt that becomes subject to standard debt collection, broken down by Division and economic sector, will be published after 15 May 2024.

Almost €120 million of warehoused debt has been deemed uncollectible for reasons such as insolvency, bankruptcy, examinership, cessation of trading etc. A breakdown of these customers by division and by sector is set out in the tables below.

The size of the business is determined by reference to their assigned Division within Revenue, which is based on their annual Irish turnover. Revenue’s Business Division manages enterprises with an annual turnover less than €3 million, which accounts for the majority of business taxpayers. Medium Enterprises Division deals with businesses with an annual Irish turnover of more than €3 million (but less than €190 million) as well as the subsidiaries/parents of such companies. Large Corporates Division deals with the largest companies with an annual Irish turnover of more than €190 million per annum.