Business gets more time to tap discounted tax debt payment plan
Companies now have to end of October to agree 3% interest rate on non-Covid tax debt
A measure in the July stimulus package provided that companies could warehouse Covid tax debt, deferring payment until their businesses reopened and then availing of reduced interest rates. Photograph: Nick Bradshaw
The decision comes as a spokeswoman for the tax office said there had been strong demand for the incentivised repayment programme, with €46 million of outstanding business taxes now covered by it.
A measure in the July stimulus package allowed companies to warehouse Covid tax debt, deferring payment until their businesses reopened and then availing of reduced interest rates. But it also provided a special amnesty on earlier non-Covid tax debt even where this had not been previously disclosed.
This amnesty allowed for an interest rate of 3 per cent to apply to outstanding tax debt once the business entered a phased payment agreement with Revenue.
Companies had to put the arrangement in place by September 30th to qualify. However, Revenue has now extended this deadline to the end of October.
“Given the uptake of this measure to date and recognising the challenges that taxpayers and tax agents are experiencing at this time, Revenue has today announced a four-week extension to the initiative,” Revenue said in a statement issued after business hours on Wednesday.
“I strongly encourage the uptake of this opportunity and of the extended deadline that now applies,” collector-general Joe Howley said. “The 3 per cent interest rate available to taxpayers under this measure is a significant reduction from the standard interest rates of 8 per cent and 10 per cent per annum that normally apply to late payments of tax.”
Tax clearance certificate
Importantly, businesses that have either warehoused Covid tax debt or agreed a payment arrangement on earlier non-Covid debt can secure a tax clearance certificate.
This is required, among other things, for access to the employee wage support scheme that is keeping many businesses afloat during the ongoing economic disruption due to the pandemic.
“The extended timeline will ensure that taxpayers and tax agents can maximise the opportunities afforded to regularise their tax payment obligations at a much-reduced cost,” Revenue said.