On 6 February 2024, Irish Revenue declared that it would implement a 0% interest rate on warehoused debt and that the necessary legislation to implement the reduction would be introduced at the next available opportunity. Irish Revenue also confirmed that it will operate the reduced interest rate on an administrative basis pending the legislative change. Revenue has also assured that, where a business has already paid warehoused debt, which was subject to interest at 3%, it will get a refund of that interest.
Approximately 58,000 individual customers were availing of the Debt Warehouse Scheme (DWS) on 26 January 2024, with a balance of €1.72 billion outstanding. Almost 70% of those customers have warehoused debt of less than €5,000.
Businesses availing of the DWS have until 01 May 2024 to either pay their warehoused debt in full, if they can or engage with Revenue on addressing the debt, including arrangements for a Phased Payment Arrangement (PPA).
It remains a key condition of the DWS that businesses continue to file their current tax returns and pay current liabilities as they fall due. By remaining in the warehouse, businesses will benefit from the 0% interest rate and flexible payment options available in respect of warehoused debt.
The consequence of not meeting these conditions is that the warehouse facility is revoked, which will result in the standard interest rate of 10% applying, backdated to when the debt arose, and the immediate enforcement of all outstanding debt, including interest.
