knowledge 19 October 2023 |

Updated Guidelines for Phased Payment Arrangements

Debt Warehousing

Approximately 6,000 taxpayers have warehoused debt balances of over €50,000 which totals €1.6 billion of the entire warehoused debt under the COVID-19 support scheme. PPAs to the value of approximately €100 million of warehoused debt have been entered into to date.

Taxpayers with warehoused debt have until 01 May 2024 to either pay back their deferred tax liabilities in full or agree a PPA with Revenue.

What is a PPA?

Revenue recognises that taxpayers may have difficulties in discharging their tax liabilities. A PPA is a concession which allows taxpayers to repay tax debts in instalments over an agreed period of time.  All PPAs must include a minimum down payment of 25% or 40% (where tax clearance is required) of the total liability outstanding. To be eligible for a PPA, the taxpayer must demonstrate that the business is viable and able to meet all future tax payment obligations when due.

PPA Application

Taxpayers with debts greater than €500 (tax, interest and penalties combined) can apply for a PPA online by completing the ePPA1 form and uploading supporting documentation via Revenue Online Service (“ROS”). All outstanding tax returns must be filed prior to making the application. The supporting documentation required by Revenue depends on the level of the tax debt:

• Where the debt is less than or equal to €50,000, no additional documents are required during the application stage (although supporting documentation may be requested by Revenue where deemed necessary).

• Where the debt is between €50,000 and €100,000, up to date bank statements must be provided. The following additional documents may also be required:
  • Cash flow projections for the following six months; and
  • Up to date management accounts.

• Where the debt is greater than €100,000, the following documents are required:
  • Up to date bank statements;
  • Cash flow projections for the following six months; and
  • Up to date management accounts.

If approved by Revenue, the PPA will commence as per the terms and conditions agreed by the taxpayer during the application process.

Alterations to and Compliance with PPAs

Minor rescheduling of the PPA (including requests to defer payments, change the payment dates or take a payment break) may be facilitated by Revenue depending on the overall duration of the arrangement and the extent of the short-term difficulties facing the taxpayer.

A taxpayer should be proactive in approaching Revenue to discuss any issues of non-compliance with the terms of the PPA. The taxpayer should explain the basis for non-compliance as well as the steps and timeframe needed to restore compliance. A PPA may be cancelled if current taxes and returns are not paid and filed on time. Where debts remaining outstanding, Revenue will initiate appropriate collection and enforcement action.

Also contributed to by Caroline McCarthy