Small Firms Association wants easier terms for firms repaying warehoused taxes
According to statistics published by Revenue last week, 36pc of firms with warehoused tax debt have already paid some of their arrears, leaving €2.7bn owing
The Small Firms Association (SFA) is seeking easier repayment terms for small businesses that warehoused their tax debts during the pandemic and are now facing difficult trading conditions.
The lobby group is writing to Tánaiste Leo Varadkar and Finance Minister Paschal Donohoe this week asking for longer fixed repayment periods and 0pc interest on parked tax arrears, as well as “bespoke engagement” between Revenue and struggling businesses.
The SFA said that although small firms were back trading after the pandemic, the cost of doing business was rising “at an alarming rate”, while the crisis in Ukraine was adding to price pressures for the sector.
“It’s a bit of a perfect storm,” said SFA director Sven Spollen-Behrens. “It’s a challenging time for small business with all the cost pressures and wage demands and some sectors are still severely impacted [by the Covid-19 emergency].”
Mr Spollen-Behrens said there is “no one-size-fits-all" solution for the cash flow problems of small businesses, but making it easier for SMEs to repay tax debts built up over the last two years should be an option.
“What we’re asking for is not expensive,” he said.
A total of €3.2bn in tax liabilities were “parked” during the Covid emergency out of a total of €30.9bn that was eligible for the Revenue warehousing scheme, meaning 90pc of companies are paid up.
According to statistics published by Revenue last week, 36pc of firms with warehoused tax debt have already paid some of their arrears, leaving €2.7bn owing.
The scheme was used by 105,000 companies.
Businesses can leave their debts parked until April 30, 2023 without accruing interest, after which 3pc interest will apply for the duration of the payment schedule. Interest on tax debt is typically 8pc-10pc.
The SFA wants the 0pc interest extended for the entire term of the debt and is asking for fixed repayment periods of up to three years to standardise the treatment of all companies.
Tax officials have been contacting all firms in the warehousing scheme to let them know how much they owe and whether any of their returns are missing.
Those not up to date must submit outstanding returns by the end of the month or face an immediate demand to repay, Revenue says.