Revenue reveals further cashflow help for businesses

Revenue has announced further measures to help companies with cashflow difficulties through the coronavirus crisis.

The tax collector has suspended the charging of interest on late payments for May and June PAYE liabilities due in June and July from small and medium sized firms (SMEs) with turnover of less than €3m.

It has also suspended late payment interest on May and June VAT liabilities normally due in July from SMEs.

However, while the suspension will be automatic for SMEs, larger businesses will have to request it if they want to avail of it by contacting the Collector-General’s office or by engaging directly with their Large Corporate Division or Medium Enterprise Division branch contacts.

The charging of interest on late payments has already been suspended for January and February as well as March and April VAT as well as February/March and April PAYE (Employers) liabilities. 

The total cost of the deferrals during March and April according to Revenue is more than €1.26bn.

Despite the suspension of the interest, Revenue says it is important tax returns are filed, even where payment or part payment is not immediately possible. 

“Where key personnel are unavailable to compute the tax returns due to the COVID-19 virus, businesses should still file on a ‘best estimates’ basis,” it said in a statement.

“Any subsequent amendments can be completed on a self-correction basis without penalty.”

Revenue also revealed this evening that it will operate the warehousing of deferred tax debts scheme, announced last weekend by the Government, on an administrative basis until the necessary legislation has been enacted.

“In effect the amounts deferred from March will be warehoused,” it said.

“Under the scheme, VAT and PAYE (Employer) tax debts deferred while a business is unable to trade or was subject to restricted trading due to the COVID-19 related health restrictions, as well as debts for an additional two months after the business resumes ‘normal’ trading, will be ringfenced by Revenue.”

“There will be no collection of any of the debt in question during this period and no interest will apply.”

If firms want to avail of the scheme they will have to first quantify the tax debt by filing all relevant returns for the period in question.

Once trading returns to normal, the VAT and PAYE owed will be warehoused for a year.

“However, businesses will be expected to pay current liabilities as they arise during this 12-month period,” Revenue said.

Once the 12 month period is up, the outstanding debt will incur a 3% interest rate until it is paid back.

Normally unpaid VAT and PAYE is charged 10% interest.

A company’s tax clearance will not be impacted if it uses the scheme.

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