THE MINISTER FOR Finance has announced that the interest rate on warehoused tax debt has been reduced to 0%. 

It comes amid a wave of restaurant closures in recent months, with owners saying that the pressures facing them are like never before. 

The Tax Debt Warehousing Scheme was introduced for businesses following the Covid-19 pandemic.

The scheme was intended to help businesses experiencing cash flow problems, by allowing them to defer paying some tax liabilities until they were in a position to deal with the debt.

There is currently €1.72 billion owed by under 57,500 businesses under the scheme. This figure has decreased, at one point over €3 billion was owed by 110,000 businesses.

Revenue has confirmed that any businesses who have already paid warehoused debt, which was subject to interest at 3%, will get a refund of that interest.

It said that “flexible payment options available” in respect of warehoused debt.

Businesses will also have possibility to extend the duration of payment arrangements beyond the typical three to five-year duration on a case-by-case basis, and that an initial down payment may not always be required.

McGrath said he will be bringing forward the necessary legislation to give effect to the tax reduction, adding that Revenue has confirmed that it will implement the 0% on an administrative basis in the meantime.

“This Government is acutely aware of the ongoing cost pressures faced by businesses and is determined that viable businesses are given every chance to succeed in a challenging trading environment,” the Finance Minister said.

Businesses availing of the Tax Debt Warehousing scheme must engage with Revenue before 1 May to either pay their warehoused debt in full or discuss a separate payment plan.

They must also file their current tax returns on time and meet their current tax liabilities as they fall due.

“As the Revenue statement said, Revenue will be pragmatic and flexible in relation to the payment plans on warehoused debt and will work with businesses in the scheme so that they can secure the viability of their business into the future,” McGrath added.