Budget 2021; Income Tax Warehousing Update
Catherine McGovern

What were the changes announced in the Budget?

In our previous alerts, we outlined the Tax Warehousing and Phased Payment Arrangements. Budget 2021 announced the extension of the Tax Debt Warehousing Scheme if because of the impact of Covid-19, a taxpayer is unable to pay the following tax liabilities:

  • 2019 Income Tax liability and
  • 2020 Preliminary Income Tax.

In addition, the Revenue announced an extension to the Phased Payment Arrangements to 10th December for 2019 Income Tax, for taxpayers that did not satisfy their 2019 Preliminary Income Tax obligations in 2019. The Tax Warehousing and PPA are two different reliving provisions, which we have summarised below;

In the case of taxpayers who were not chargeable persons in 2019, warehousing may apply to preliminary tax liabilities for 2020 where the taxpayer contacts Revenue, advising that they are unable to pay their liabilities as a result of the impact of Covid-19 restrictions.

Next Steps:

If you wish for us to review whether you can avail of the Tax Warehousing or a Phased Payment Arrangement please contact the tax team in PKF today so we can prepare your 2019 tax return, determine your tax liabilities for 2019 and 2020 and make the appropriate applications as soon as possible.

The 2019 Income Tax deadline has been extended from 31st October 2020 to 10th December. However, if you are not in a position to;

  1. Pay your 2019 Income Tax &
  2. 2020 Preliminary Tax

And Tax Warehousing or PPA provisions do not apply to you, the 10th December extension does not apply and you should submit your 2019 Income Tax return by 31st October 2020 to avoid a 5% surcharge for a late submission.

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