The Government has announced that Revenue will be permitted to 'warehouse' VAT and payroll tax debt that has arisen as a result of the COVID-19 restrictions. While the legislation is yet to be enacted the following are the key points:
- COVID-19 related VAT and payroll tax debts, due from 1 March 2020 to the date when sectoral restrictions are lifted, will be parked for a period of 12 months.
- Relevant tax periods currently include:
- VAT: January/February, March/April and May/June;
- Employer PAYE/PRSI liabilities: February, March, April, May and June.
- SMEs (turnover of less than €3m) should qualify automatically; larger businesses (over €3m turnover) will be assessed on a case-by-case basis by Revenue.
- No interest will accrue on the tax debts during the 12 month period; a reduced interest rate of 3% (down from 10%) will then apply until the debt is paid.
- The timeframe allowed to pay the ‘warehoused’ debt will be flexible and will take account of current taxes due.
- For the warehousing arrangement to apply, all returns must be filed in accordance with the Revenue guidance that has applied since the start of the current pandemic.
Last updated 8 May 2020