Towards the end of this month, Revenue will reintroduce the requirement to submit the ePPA1 application form for obtaining a PPA (Phased Payment Arrangement), making some minor modifications to the form. In specific cases, additional documents will be necessary to support your PPA application.

Below I go through the main questions business owners are asking:

Get informed

Are Bank Statements Required?

To simplify the application process further, the threshold for requesting bank statements will be raised to instances where the debt surpasses €50,000. Additional supporting materials, such as cash-flow statements and management accounts, will be mandatory for debts exceeding €100,000, with no changes in this regard..

Earnings-Based Valuation (Income Approach)

Are Revenue contacting businesses?

By the conclusion of May, a third of the 61,000 businesses in the DWS (Debt Warehousing Scheme) had balances lower than €100. In general, 65% of taxpayers had warehoused debt balances of less than €5,000. This number has been steadily decreasing. Roughly 6,000 taxpayers with balances exceeding €50,000 constitute €1.6 billion of the total warehoused debt, which is the primary focus of the Collector-General's Division. Over the summer, an outreach phone campaign was conducted for specific businesses in this group. The purpose was to inform them about available payment options, and some of these contacts resulted in PPA agreements.

Market-Based Valuation (Market Approach)

Do I need to start repaying before May 1, 2024

There is no obligation to commence repayments for the warehoused debt prior to May 1, 2024. Be aware that interest is accruing on the debt in most cases since January 1, 2023. To date, PPAs totaling around €100 million of warehoused debt have been established. PPAs offer substantial flexibility in terms of payment terms, amounts, and down payments. An initial down payment of 0.1% of the tax and interest can be initiated using the online application system to begin the engagement and negotiation process with the Revenue caseworker. Additional flexibilities are available once the PPA is in effect, including payment breaks, deferment of payment dates, and adjustments to payment amounts. It is possible to agree to a PPA now with monthly payments commencing from May 1, 2024.

IS there a "How to Video" I can use:

Revenue has published several instructional "How to" videos regarding the PPA process, encouraging taxpayers to view them before applying for a PPA. These videos help individuals become familiar with the PPA online platform and comprehend the various flexible payment options tailored to their unique circumstances. The video topics include: PPA Application. Deferring Your Next Payment,. Requesting a Payment Break. Debt Consolidation. Updating Bank Details. Changing Payment Dates. Making Full Payments. Click on the image to the left for the link.

CAn I offset Refunds against the warehoused debt?

A taxpayer can request that refunds be used to offset their warehoused debt on an ongoing basis if they desire to do so. Section 1.2 of the Value Added Tax (VAT) Repayment Offset Manual provides guidelines on offsetting VAT repayments. These can be against selected periods and tax categories in the DWS via the VAT return.

What else do I need to be aware of?

It is crucial to uphold current tax compliance to preserve the advantages of the DWS. Revenue emphasizes that businesses participating in the scheme, facing difficulties in meeting their current liabilities given the current inflationary climate, should initiate early discussions with Revenue to establish a viable solution.

To Summarise

The 1st May 2024 deadline seems quite a long time away but is important to be informed and aware of your obligations and how you can go about dealing with the warehoused debt. When planning your cash flow for 2024 and beyond, you will need to factor in monthly repayments to revenue. If your business operates in a variable cyclical sector, you will need to plan for payment breaks during those quiet months and then larger repayments during the busier times.

Also, remember interest is accruing all the time on this debt and will need to be repaid on top of the outstanding tax amounts.



John Carolan ACMA, CEO of Solve Outsource

Contact Email: john@solve.ie