Debt Warehousing Scheme – Final Opportunity to Correct Tax Defaults
Friday, 07 October 2022
Revenue is offering taxpayers who are eligible to participate in the Debt Warehousing Scheme (“DWS”) a final opportunity to “self-review” their tax returns and include any additional eligible tax liabilities in the DWS. To do so, an unprompted disclosure must be made to Revenue by 31 January 2023.
Revenue began sending letters setting out this opportunity last week.
The advantages of taking action are:
- The additional liabilities will be debt warehoused interest free up to 31 December 2022 (or 30 April 2023 in some cases), and benefit from a reduced 3% rate of interest thereafter.
- If Revenue identify tax defaults before a disclosure is made, taxpayers are no longer eligible for the DWS and all outstanding warehoused liabilities become subject to immediate collection with standard interest rates applied. This is not currently subject to any materiality limits.
- The normal benefits of making an unprompted qualifying disclosure will apply (mitigation of tax-geared penalties, non-publication of the tax settlement and non-prosecution).
Taxpayers should consider taking action now to regularise any relevant tax defaults covered by this opportunity.
Background
Under the DWS, taxpayers were allowed to defer paying certain tax debts incurred in ‘Period 1’, which ran from January 2020 to December 2021 for most businesses, with an extension to April 2022 in certain cases.
These tax debts are deferred on an interest free basis up to 31 December 2022 (or 30 April 2023 where the extension applies) and are repayable at a reduced interest rate of 3% per annum thereafter.
Taxes eligible for debt warehousing included VAT and Employer PAYE liabilities arising in Period 1, and Income Tax liabilities for 2019, 2020 and 2021.
Next steps
The ByrneWallace LLP team has significant experience advising clients on pro-actively managing tax risk, responding to Revenue compliance interventions and regularising their tax affairs.
If you would like help or advice with submitting a qualifying disclosure to Revenue, please contact Lee Squires or any member of the ByrneWallace Tax Advisors team.
