Update June 2021 on VAT/PAYE
Revenue have recently issued updated guidance on debt warehousing as regards VAT and PAYE liabilities.
You will recall that Revenue had previously issued guidance, allowing businesses to “warehouse” their VAT and PAYE liabilities at a 0% interest cost. Businesses could avail of this 0% interest cost during that period when they were experiencing cash flow and trading difficulties arising from the impacts of Covid-19; Revenue referred to this period as “Period 1”.
Revenue have now issued guidance to the effect that Period 1 will extend, for all businesses who availed of debt warehousing, until 31 December 2021. This is a very welcome clarification.
After “Period 1” expires, businesses will then be able to avail of a zero rate of interest for a further 12 months (ie, until 31 December 2022); and subsequently avail of a reduced interest rate of 3% thereafter. You might refer to previous circulars issued by PSC with regard to this topic. Alternatively, you can call your usual PSC contact.
It is also possible for certain taxpayers to warehouse their income tax liabilities. Revenue have also issued guidance in relation to this; and PSC will issue a circular in this regard shortly.