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The construction and retail trades accounted for the largest slice of the €88.5M in “warehoused debt” that has been written off as uncollectible by Ireland’s Revenue Commissioners.
The construction sector represented €15M of the total, surpassed only by the warehousing and retail sector at €28.8M in debts that will not be collected, according to the Irish Independent.
The Debt Warehousing Scheme was introduced during the pandemic in a bid to stop businesses collapsing, but a key condition of the scheme was that current liabilities be filed and paid on time. The scheme covered value-added tax debts, pay-as-you-earn payments, some self-assessed income tax and overpayments made to businesses under wage support schemes.
The scheme originally required businesses to make arrangements with the Revenue Commissioners to start paying the warehoused debt back by the end of 2022, although this was subsequently extended to May 2024.
Finance Minister Michael McGrath provided a breakdown by sector in response to a parliamentary question in November from Sinn Féin TD Louise O’Reilly.
Other major sectors where the most debt was written off include manufacturing's €8.6M, information and communications' €8.3M, accommodation and food services' €7.2M, and transportation and storage's €6.1M.
In all, just under €2B of debts remain warehoused, and the scheme allowed those debts to be parked at 0% interest until the end of December 2022, to April 2023 for businesses on an extended scheme, or from May for those participants on the extended scheme. These companies are now being charged 3% interest.
McGrath added that at the end of September there were 11,816 businesses and individuals with warehoused debts totalling €312M that had their warehouse status revoked due to persistent noncompliance with the scheme’s conditions.
At the end of May, companies on the scheme still owed a collective €2B, although the Revenue Commissioners said that the rate of companies paying off their remaining debt was accelerating.
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