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39 1997

TAXES CONSOLIDATION ACT, 1997

CHAPTER 4

Collection and recovery of income tax on certain emoluments (PAYE system)

Interpretation ( Chapter 4 ).

[ITA67 s124]

983. —In this Chapter, except where the context otherwise requires—

emoluments” means anything assessable to income tax under Schedule E, and references to payments of emoluments include references to payments on account of emoluments;

employee” means any person in receipt of emoluments;

employer” means any person paying emoluments;

income tax month” means a month beginning on the 6th day of any of the months of April to March in any year of assessment;

tax deduction card” means a tax deduction card in the form prescribed by the Revenue Commissioners or such other document corresponding to a tax deduction card as may be authorised by the Revenue Commissioners in any particular case.

Application.

[ITA67 s125; FA85 s6(1) and (2)]

984. —(1) This Chapter shall apply to all emoluments except emoluments which are emoluments in respect of which the employer has been notified by the inspector that they are emoluments which arise from an office or employment and from which, in the opinion of the inspector, having regard to the circumstances of the office or employment or to the amount of the emoluments, the deduction of tax by reference to this Chapter is impracticable.

(2) The inspector may, if a change in the circumstances of the office or employment or in the amount of the emoluments so warrants, cancel a notification given under subsection (1) by notice in writing given to the employer, and this Chapter shall then apply to payments of emoluments arising from the office or employment made after the date of such notice.

(3) Any notice issued by or on behalf of the Revenue Commissioners under section 125 of the Income Tax Act, 1967 , before the 6th day of April, 1986, shall not have effect in relation to emoluments arising in the year 1997-98 or any subsequent year of assessment.

Method of collection.

[ITA67 s126; FA72 s46(1) and Sch4 PtI]

985. —On the making of any payment of any emoluments to which this Chapter applies, income tax shall, subject to this Chapter and in accordance with regulations under this Chapter, be deducted or repaid by the person making the payment notwithstanding that—

(a) when the payment is made no assessment has been made in respect of the emoluments, or

(b) the emoluments are in whole or in part emoluments for some year of assessment other than that during which the payment is made.

Regulations.

[ITA67 s127(1), (2), (3) (a) (i) and (b) (part of), (4), (5) and (7); FA72 s2(1); FA74 s11 and Sch1 PtII; FA93 s2(2) and Sch1 PtI par2; FA97 s6]

986. —(1) The Revenue Commissioners shall make regulations with respect to the assessment, charge, collection and recovery of income tax in respect of emoluments to which this Chapter applies or of income tax for any previous year of assessment remaining unpaid, and those regulations may, in particular and without prejudice to the generality of the foregoing, include provision—

(a) for requiring any employer making any payment of emoluments to which this Chapter applies, when that employer makes the payment, to make a deduction or repayment of tax calculated by reference to such rate or rates of tax for the year as may be specified and any allowances, deductions and reliefs appropriate in the case of the employee as indicated by the particulars on the tax deduction card supplied in respect of the employee by the Revenue Commissioners;

(b) for rendering persons who are required to make any such deduction or repayment, in the case of a deduction (whether or not made), accountable for the amount of the tax and liable to pay that amount to the Revenue Commissioners and, in the case of a repayment, entitled (if a repayment has been made) to be paid it, or given credit for it, by the Revenue Commissioners;

(c) for the production to and inspection by persons authorised by the Revenue Commissioners of wages sheets and other documents and records for the purpose of satisfying themselves that tax in respect of emoluments to which this Chapter applies has been and is being duly deducted, repaid and accounted for;

(d) for the collection and recovery, whether by deduction from emoluments paid in any year or otherwise, of tax in respect of emoluments to which this Chapter applies which has not been deducted or otherwise recovered during the year;

(e) for appeals with respect to matters arising under the regulations which would not otherwise be the subject of an appeal;

(f) for the deduction of tax at the standard rate and at the higher rate in such cases or classes of cases as may be provided for by the regulations;

(g) for requiring any employer making any payment of emoluments to which this Chapter applies, when making a deduction or repayment of tax in accordance with this Chapter and regulations under this Chapter, to make such deduction or repayment as would require to be made if the amount of emoluments were the emoluments reduced by the amount of any contributions payable by the employee and deductible by the employer from the emoluments being paid and which by virtue of Chapter 1 of Part 30 are for the purposes of assessment under Schedule E allowed as a deduction from the emoluments;

(h) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limit specified in subsection (5) to notify the Revenue Commissioners within the period specified in the regulations that that employer is such an employer;

(i) for requiring every employer who pays emoluments to which this Chapter applies exceeding the limits specified in subsection (5) to keep and maintain a register of that employer's employees in such manner as may be specified in the regulations and, on being required to do so by the Revenue Commissioners, to deliver the register to the Revenue Commissioners within the period specified in the notice;

(j) for treating persons who are not employers as employers in such cases or classes of cases as may be provided for by the regulations.

(2) Regulations under this section shall apply notwithstanding anything in the Income Tax Acts, but shall not affect any right of appeal which a person would have apart from the regulations.

(3) (a) Tax deduction cards shall be prepared with a view to securing that in so far as may be practicable the total tax payable for the year of assessment in respect of any emoluments is deducted from the emoluments paid during that year.

(b) In paragraph (a), any reference to the total tax payable for a year shall be construed as a reference to the total tax estimated to be payable for the year in respect of the emoluments, subject to a provisional deduction for allowances and reliefs and subject also, if necessary, to making an addition to that estimated amount (including a nil amount) for amounts remaining unpaid on account of income tax for any previous year of assessment and to making a deduction from that estimated amount for amounts overpaid on account of any such income tax.

(4) Notwithstanding any other provision of this section, when stating on a tax deduction card an amount in respect of allowances, deductions and reliefs the amount may be rounded up to a convenient greater amount and stated accordingly, and, as respects the amount of tax which is not deducted in the year of assessment as a result of such statement, the adjustment appropriate for its recovery shall be made in a subsequent year of assessment.

(5) (a) The limits referred to in paragraphs (h) and (i) of subsection (1) shall be emoluments at a rate equivalent to a rate of £6 per week, or in the case of an employee with other employment, £1 per week.

(b) In the case of employees paid monthly or at longer intervals, the references in paragraph (a) to a rate of £6 per week and a rate of £1 per week shall be treated as references to a rate of £26 per month and a rate of £4.50 per month respectively.

(6) (a) In this subsection—

domestic employee” means an employee who is employed solely on domestic duties (including the minding of children) in the employer's private dwelling house;

domestic employment” means employment by reference to which an employee is a domestic employee.

(b) Notwithstanding subsection (5), as on and from the 6th day of June, 1997, regulations made in accordance with paragraphs (h) and (i) of subsection (1) shall not apply to an employer (being an individual) who pays emoluments to an employee engaged by that employer in a domestic employment where—

(i) the emoluments from that employment are less than £30 per week, and

(ii) the employer has only one such employee.

(7) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

Penalties for breach of regulations.

[ITA67 s128(1), (1A), (2) and (4); FA72 s2(2); FA73 s43; FA76 s1; FA81 s4; FA82 s60; FA92 s234 and s248]

987. —(1) Where any person does not comply with any provision of regulations under this Chapter requiring that person to send any return, statement, notification or certificate or to remit income tax to the Collector-General or fails to make any deduction or repayment in accordance with any regulation made pursuant to section 986 (1)(g), that person shall be liable to a penalty of £1,200.

(2) Where the person mentioned in subsection (1) is a body of persons, the secretary of the body shall be liable to a separate penalty of £750.

(3) All penalties for failure to comply with any provision of regulations under this Chapter may, without prejudice to any other method of the recovery, be proceeded for and recovered summarily in the like manner as in summary proceedings for the recovery of any fine or penalty under any Act relating to the excise.

(4) In proceedings for recovery of a penalty under this section—

(a) a certificate signed by an officer of the Revenue Commissioners which certifies that he or she has inspected the relevant records of the Revenue Commissioners and that it appears from them that during a stated period—

(i) a stated return, statement, notification or certificate was not received from the defendant,

(ii) stated wages sheets or other records or documents were not produced by the defendant,

(iii) the defendant did not remit stated tax to the Collector-General, or

(iv) the defendant did not make a stated deduction or repayment of tax,

shall be evidence until the contrary is proved that the defendant did not during that period send that return, statement, notification or certificate or did not produce those wages sheets or other records or documents or did not remit that tax to the Collector-General or did not make that deduction or repayment of tax;

(b) a certificate signed by an officer of the Revenue Commissioners which certifies that he or she has inspected the relevant records of the Revenue Commissioners and that it appears from them that a stated return or other document was duly sent to the defendant on a stated day shall be evidence until the contrary is proved that that person received that return or other document in the ordinary course;

(c) a certificate signed by an officer of the Revenue Commissioners which certifies that he or she has inspected the relevant records of the Revenue Commissioners and that it appears from them that during a stated period the defendant was an employer or a person whose name and address were registered in the register kept and maintained under regulation 8(4) of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), shall be evidence until the contrary is proved that the defendant was during that period an employer or, as the case may be, a person whose name and address were so registered;

(d) a certificate certifying as provided for in paragraph (a), (b) or (c) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.

Registration of certain persons as employers and requirement to send certain notifications.

[FA74 s72]

988. —(1) Where the Revenue Commissioners have reason to believe that a person is liable to send them a notification under regulation 8 of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), and has not done so, they may register that person's name and address in the register kept and maintained under paragraph (4) of that regulation (in this section referred to as “the register”) and serve a notice on that person stating that that person has been so registered.

(2) Where a notice is served under subsection (1) on a person, the following provisions shall apply:

(a) if the person claims to be not liable to send the notification referred to in subsection (1), the person may, by giving notice in writing to the Revenue Commissioners within the period of 14 days from the service of the notice under subsection (1), require the claim to be referred to the Appeal Commissioners and their decision on the claim shall be final and conclusive;

(b) if no such claim is, within the time specified in paragraph (a), required to be referred, or if such claim is required to be referred and there is a determination by the Appeal Commissioners against the appellant, the appellant shall be regarded for the purposes of the Regulations referred to in subsection (1) as an employer who had sent a notification under paragraph (1) of regulation 8 of those Regulations;

(c) if a claim is required to be referred and there is a determination by the Appeal Commissioners in favour of the appellant, the Revenue Commissioners shall on that determination delete the appellant's name and address from the register.

(3) (a) Where a person whose name and address is registered in the register is not liable, under regulation 31 of the Regulations referred to in subsection (1), to remit to the Collector-General any amount of tax for an income tax month, such person shall, within the period of 9 days from the end of that month, make a declaration to that effect in a form prescribed by the Revenue Commissioners and shall send that form to the Collector-General.

(b) Where a person whose name and address is registered in the register ceases to pay emoluments to which this Chapter applies, such person shall, within the period of 14 days from the date on which such person ceased to pay such emoluments, notify the Revenue Commissioners to that effect.

(4) Section 987 shall apply to a non-compliance with subsection (3) as it applies to a non-compliance with regulations under this Chapter.

Estimation of tax due for income tax months.

[FA68 s7(1), (2), (4), (5) and (8); FA85 s9(a)]

989. —(1) In this section and in sections 990 and 991 , “the regulations” means any regulations under section 986 .

(2) Where the Revenue Commissioners have reason to believe that a person was liable under the regulations to remit income tax in relation to any income tax month, and the person has not remitted any income tax in relation to that income tax month, they may—

(a) estimate the amount of tax which should have been remitted by the person within the period specified in the regulations for the payment of such tax, and

(b) serve notice on the person of the amount so estimated.

(3) Where a notice is served under subsection (2) on a person, the following provisions shall apply:

(a) the person, if claiming to be not liable to remit any tax for the income tax month to which the notice relates, may by giving notice in writing to the Revenue Commissioners within the period of 14 days from the service of the notice require the claim to be referred for decision to the Appeal Commissioners and their decision shall be final and conclusive;

(b) on the expiration of that period, if no such claim is required to be so referred or, if such claim is required to be referred, on final determination by the Appeal Commissioners against the claim, the estimated tax specified in the notice shall be recoverable in the like manner and by the like proceedings as if—

(i) the person were an employer, and

(ii) the amount specified in the notice were the amount of tax which the person was liable under the regulations to deduct from emoluments paid by the person during the income tax month specified in the notice reduced by any amounts which the person was liable under the regulations to repay during the income tax month;

(c) if at any time after the service of the notice the person furnishes a declaration of the amount which the person is liable under the regulations to remit in respect of the income tax month specified in the notice and pays the tax in accordance with the declaration together with any interest and costs which may have been incurred in connection with the default, the notice shall, subject to paragraph (d), stand discharged and any excess of tax which may have been paid shall be repaid;

(d) where action for the recovery of tax specified in a notice under subsection (2) has been taken, being action by means of the institution of proceedings in any court or the issue of a certificate under section 962 , paragraph (c) shall not, unless the Revenue Commissioners otherwise direct, apply in relation to that notice until that action has been completed.

(4) A notice given by the Revenue Commissioners under subsection (2) may extend to 2 or more consecutive income tax months.

(5) The Revenue Commissioners may nominate any of their officers to perform any acts and discharge any functions authorised by this section to be performed or discharged by the Revenue Commissioners.

Estimation of tax due for year.

[FA68 s8(1), (2) and (4); FA85 s9(b)]

990.—(1) Where the inspector or such other officer as the Revenue Commissioners may nominate to exercise the powers conferred by this section (in this section referred to as “other officer”) has reason to believe that the total amount of tax which an employer was liable under the regulations to remit in respect of the respective income tax months comprised in any year of assessment was greater than the amount of tax (if any) paid by the employer in respect of those months, then, without prejudice to any other action which may be taken, the inspector or other officer—

(a) may make an estimate in one sum of the total amount of tax which in his or her opinion should have been paid in respect of the income tax months comprised in that year, and

(b) may serve notice on the employer specifying—

(i) the total amount of tax so estimated,

(ii) the total amount of tax (if any) remitted by the employer in relation to the income tax months comprised in that year, and

(iii) the balance of tax remaining unpaid.

(2) Where a notice is served on an employer under subsection (1)

(a) the employer may, if claiming that the total amount of tax or the balance of tax remaining unpaid is excessive, on giving notice in writing to the inspector or other officer within the period of 30 days from the service of the notice, appeal to the Appeal Commissioners;

(b) on the expiration of that period, if no notice of appeal is received or, if notice of appeal is received, on determination of the appeal by agreement or otherwise, the balance of tax remaining unpaid as specified in the notice or the amended tax as determined in relation to the appeal shall become due and be recoverable in the like manner and by the like proceedings as if the balance of tax or the amended tax had been charged on the employer under Schedule E.

(3) A notice given by the inspector or other officer under subsection (1) may extend to 2 or more years of assessment.

Interest.

[ITA67 s129; FA68 s9; FA73 s1(1); FA74 s71; FA75 s26; FA78 s46]

991. —(1) Where any amount of tax which an employer is liable under this Chapter and any regulations under this Chapter to pay to the Revenue Commissioners is not so paid, simple interest on the amount shall be paid by the employer to the Revenue Commissioners, and such interest shall be calculated from the expiration of the period specified in the regulations for the payment of the amount and at the rate of 1.25 per cent for each month or part of a month during which the amount remains unpaid; but, if the amount of the interest as so calculated is less than £5, the amount of interest payable shall be £5.

(2) This section shall apply—

(a) to tax recoverable by virtue of a notice under section 989 as if the tax were tax which the person was liable under the regulations to pay for the respective income tax month or months referred to in the notice, and

(b) to tax recoverable by virtue of a notice under section 990 as if the tax were tax which the person was liable under the regulations to remit for the last income tax month of the year of assessment to which the notice relates.

Appeals against estimates under section 989 or 990 .

[FA68 s10]

992. —The provisions of the Income Tax Acts relating to appeals shall apply with any necessary modifications to claims and appeals under sections 989 (3) and 990(2) as if those claims or appeals were appeals against assessments to income tax but, in relation to claims under section 989 (3), only in so far as those provisions apply to appeals to the Appeal Commissioners.

Recovery of tax.

[ITA67 s131; FA73 s22]

993. —(1) (a) The provisions of any enactment relating to the recovery of income tax charged under Schedule E shall apply to the recovery of any amount of tax which an employer is liable under this Chapter and any regulations under this Chapter to pay to the Revenue Commissioners by reference to any income tax month as if that amount had been charged on the employer under Schedule E.

(b) In particular and without prejudice to the generality of paragraph (a), this subsection applies sections 962 , 963 , 966 and 998 .

(c) Provisions as applied by this subsection shall so apply subject to any modifications specified by regulations under section 986 .

(2) Proceedings may be brought for the recovery of the total amount which the employer is liable under this Chapter and any regulations under this Chapter to pay to the Revenue Commissioners by reference to any income tax month without distinguishing the amounts which the employer is liable to pay by reference to each employee and without specifying the employees in question, and for the purposes of the proceedings that total amount shall be one single cause of action or one matter of complaint; but nothing in this subsection shall prevent the bringing of separate proceedings for the recovery of each of the several amounts which the employer is so liable to pay by reference to any income tax month and to the employer's several employees.

(3) In proceedings instituted by virtue of this section for the recovery of any amount of tax—

(a) a certificate signed by an officer of the Revenue Commissioners which certifies that a stated amount of tax is due and payable by the defendant shall be evidence until the contrary is proved that that amount is so due and payable, and

(b) a certificate so certifying and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.

(4) Any reference in this section to an amount of tax shall include a reference to interest payable in the case in question under section 991 .

(5) This section shall apply to the recovery of—

(a) any amount of tax estimated under section 989 , and

(b) any amount of tax estimated under section 990 or any balance of tax so estimated but remaining unpaid,

as if the amount so estimated or the balance of tax so estimated but remaining unpaid were an amount of tax which any person paying emoluments was liable under this Chapter and any regulations under this Chapter to pay to the Revenue Commissioners.

Priority in bankruptcy, etc. of certain amounts.

[ITA67 s132]

994. —(1) In this section, “employer's liability for the period of 12 months” means all sums which an employer was liable under this Chapter and any regulations under this Chapter to deduct from emoluments to which this Chapter applies paid by the employer during the period of 12 months mentioned in subsection (2), reduced by any amounts which the employer was liable under this Chapter and any regulations under this Chapter to repay during the same period, and subject to the addition of interest payable under section 991 .

(2) There shall be included among the debts which under section 81 of the Bankruptcy Act, 1988 , are to be paid in priority to all other debts in the distribution of the property of a bankrupt, arranging debtor or person dying insolvent so much as is unpaid of the employer's liability for the period of 12 months before the date on which the order of adjudication of the bankrupt was made, the petition of arrangement of the debtor was filed or, as the case may be, the person died insolvent.

Priority in winding up of certain amounts.

[FA89 s10]

995. —For the purposes of subsection (2) (a) (iii) of section 285 of the Companies Act, 1963

(a) the amount referred to in that subsection shall be deemed to include any amount—

(i) which, apart from regulation 31A of the Income Tax (Employments) Regulations, 1960 (S.I. No. 28 of 1960), would otherwise have been an amount due at the relevant date in respect of sums which an employer is liable under this Chapter and any regulation under this Chapter (other than regulation 31A of those Regulations) to deduct from emoluments, to which this Chapter applies, paid by the employer during the period of 12 months next before the relevant date,

(ii) reduced by any amount which the employer was liable under this Chapter and any regulation under this Chapter to repay during that period, and

(iii) with the addition of any interest payable under section 991 ,

and

(b) the relevant date shall, notwithstanding subsection (1) of section 285 of the Companies Act, 1963 , be deemed to be the date which is the ninth day after the end of the income tax month in which the relevant date (within the meaning of that subsection) occurred.

Treatment for tax purposes of certain unpaid remuneration.

[FA76 s17(1) to (3)(a) and (4)(b)]

996. —(1) In this section—

accounting period”, in relation to a trade or profession, means a period of 12 months ending on the date up to which the accounts of the trade or profession are usually made up and, where accounts of the trade or profession have not been made up, such period not exceeding 12 months as the Revenue Commissioners may determine;

date of cessation”, in relation to an office or employment, means the date on which a person ceases to hold the office or employment;

date of commencement”, in relation to an office or employment, means the date on which a person commences to hold the office or employment;

period of account”, in relation to a trade or profession, means any period, other than an accounting period, for which the accounts of the trade or profession have been made up;

period of accrual”, in relation to remuneration in respect of an office or employment in a trade or profession, means the period beginning on the later of—

(a) the first day of an accounting period, or period of account, of the trade or profession, or

(b) the date of commencement of the office or employment

and ending on the earlier of—

(i) the last day of an accounting period, or period of account, or

(ii) the date of cessation of the office or employment;

relevant date” means—

(a) in relation to an accounting period, the last day of the period, and

(b) in relation to a period of account—

(i) where the period of account is less than 12 months, the last day of the period, and

(ii) where the period of account is more than 12 months, each 5th day of April within the period and the last day of the period;

remuneration” includes all salaries, fees, wages, perquisites or profits whatever from an office or employment.

(2) Where remuneration (in this section referred to as “unpaid remuneration”) which is deductible as an expense in computing the profits or income of a trade or profession for an accounting period or period of account for the purposes of Schedule D is unpaid at a relevant date—

(a) the unpaid remuneration shall be deemed to be emoluments to which this Chapter applies and shall be deemed to have been paid in accordance with subsection (3), and

(b) this Chapter and the regulations made under this Chapter shall, with any necessary modifications, apply to the unpaid remuneration as if it had been so paid.

(3) Unpaid remuneration shall be deemed to have accrued from day to day throughout the period of accrual and there shall be deemed to have been paid on each relevant date so much of that remuneration as accrued up to that date or, if it is earlier, the date of cessation of the office or employment in respect of which the unpaid remuneration is payable—

(a) where there was no preceding relevant date, from the beginning of the period of accrual or, if it is later, the date of commencement of the office or employment in respect of which the unpaid remuneration is payable, and

(b) where there was a preceding relevant date, from the day following that date or, if it is later, the date of commencement of the office or employment in respect of which the unpaid remuneration is payable.

(4) This section shall not apply to unpaid remuneration paid before—

(a) the date of expiry of 6 months after the date (in this subsection referred to as “the deemed date”) on which that remuneration is by virtue of subsection (3) deemed to have been paid, or

(b) in the case where the period of account is one of more than 12 months, the date of expiry of 18 months from the first day of that period of account if the date of expiry is later than the deemed date.

Supplementary provisions ( Chapter 4 ).

[ITA67 s133; FA74 s11 and Sch1 PtII; FA93 s2(2) and Sch1 PtI par2]

997. —(1) No assessment under Schedule E for any year of assessment need be made in respect of emoluments to which this Chapter applies except where—

(a) the person assessable, by notice in writing given to the inspector within 5 years from the end of the year of assessment, requires an assessment to be made,

(b) the emoluments paid in the year of assessment are not the same in amount as the emoluments which are to be treated as the emoluments for that year, or

(c) there is reason to suppose that the emoluments would, if assessed, be taken into account in computing the total income of a person who is liable to tax at the higher rate or would be so liable if an assessment were made in respect of the emoluments;

but where any such assessment is made credit shall be given for the amount of any tax deducted or estimated to be deductible from the emoluments.

(2) Where an employer pays to the Revenue Commissioners any amount of tax which, pursuant to this Chapter and any regulations under this Chapter, the employer has deducted from emoluments, the employer shall be acquitted and discharged of the sum represented by the payment as if the employer had actually paid that sum to the employee.