At least 10,000 businesses are at risk of being kicked off Revenue’s debt-warehousing scheme if they do not file their late tax returns within days.
ax officials are issuing final warning notices to businesses who are using the Covid support scheme but have not filed up-to-date paperwork – a basic condition of accessing the facility.
In the region of 10,000 letters have been issued to business owners and their accountants yesterday in the first tranche of notifications, a Revenue spokesperson confirmed.
Companies that fail to submit the required documents within 10 days will lose the benefits of the scheme and be forced to pay all their back taxes immediately with interest of up to 10pc, even if they have no new liabilities to report.
Accountancy bodies are warning members and their clients to take urgent action to avoid ruinous tax bills at a time when many businesses are only beginning to recover from the pandemic.
Revenue’s latest warning comes after a sustained communications campaign to make businesses aware of how to meet their obligations to remain in the debt warehousing scheme.
A key requirement to qualify for the scheme is that all tax returns must be filed, even if the liability cannot be paid or there is no liability. In addition, current taxes must be paid as they fall due.
Participating firms were last contacted at the end of March when they were told how much they owed and whether they had any unfiled returns. That notice gave companies until April 30 to get their paperwork in order.
Now a month beyond that deadline, Revenue appears to have run out of patience.
The Consultative Committee of Accountancy Bodies in Ireland (CCAB-I) pleaded for a deadline extension in April due to the heavy workload members have shouldered through the Covid crisis, but their request was denied by Collector General Joe Howley.
“The requirement to quantify the debts on a month-by-month basis by filing returns due was the almost sole condition attaching to eligibility for debt warehousing,” he wrote to the CCAB-I.
“It was not unreasonable to expect that businesses should meet this condition.”
Finance Minister Paschal Donohoe had already extended the scheme itself in January to allow about 21,000 businesses hit by Omicron restrictions to park tax debts accrued up to the end of April.
Currently, more than 97,000 firms owe €3bn in deferred taxes accumulated during two years of Covid-19. The Department of Finance has estimated that about €800m ultimately will not be repaid.
Most firms will owe nothing before January 2023 as the debts remain warehoused on an interest-free basis for 12 months before they become collectable, although businesses may choose to pay in the meantime at their discretion.
Revenue updated its phased payment arrangement system this week to allow taxpayers in the scheme to consolidate warehoused debts with other tax liabilities for simpler management and transparency.