€85m in tax debt from more than 950 businesses written off

There were approximately 12,000 businesses and individuals with debts totalling €310m — for previously warehoused periods — that had their warehouse status revoked due to non-compliance with the scheme conditions. File photo: iStock

Around €85m in warehoused tax debt from over 950 businesses has been written off due to these companies going bankrupt or entering into examinership, a report by the Comptroller and Auditor General has found.

The Debt Warehousing Scheme was brought in during the pandemic to support businesses through lockdown measures. It allowed companies to defer the payment of Vat, employer PAYE and certain other tax liabilities including EWSS overpayments.

As of the end of July, there were approximately 60,000 businesses and individuals availing of the debt warehousing scheme with a total of €1.9bn of debts warehoused. This is down from the peak of just over €3bn.

Around 10% of the business and individuals have debt balances greater than €50,000, and those debts account for almost 85% of the total warehoused debt. The top 247 taxpayers had average warehoused debt liabilities of €2.5m.

So far, €85m in debt, which had been warehoused by 956 businesses, has been deemed as “uncollectible”, according to the report, due to “reasons such as liquidation, examinership, bankruptcy and cessation of trading”.

These businesses and the associated debt have been removed from the debt warehousing scheme.

Also, there were approximately 12,000 businesses and individuals with debts totalling €310m — for previously warehoused periods — that had their warehouse status revoked due to non-compliance with the scheme conditions.

However, 559 of those — with debts of €58m — had their warehouse status re-instated once Revenue confirmed that the issues of non-compliance had been addressed.

In October last year, Revenue announced an extension to the debt warehousing scheme in recognition of the impact of the energy cost crisis. The extension means that taxpayers have until May 1 next year to enter into a phased payment arrangement or pay their debt.