Finance Act, 1988

Notices of preliminary tax.

12.—(1) Where—

(a) a chargeable person defaults in the making of a payment of preliminary tax for a relevant chargeable period, or

(b) at any time prior to the due date for the payment of an amount of preliminary tax for a relevant chargeable period, the inspector considers it appropriate to do so,

the inspector may give notice in writing to the chargeable person of the amount of the preliminary tax which, in the opinion of the inspector, ought to be paid by the chargeable person for that chargeable period:

Provided that a notice shall not be given under this subsection to a chargeable person for a relevant chargeable period at any time after the chargeable person has delivered a return for that chargeable period.

(2) Subject to the subsequent provisions of this section, an amount of preliminary tax specified in a notice under subsection (1) shall be due and payable to the Collector by the chargeable person on the due date for the payment of an amount of preliminary tax for the relevant chargeable period to which the notice relates.

(3) Subject to subsection (4), where, on or before the specified return date for a chargeable period, the chargeable person makes a payment of preliminary tax for the chargeable period under section 11 , or on or before that date the chargeable person gives notice in writing to the Collector that he considers that he will not have a liability to pay tax for the chargeable period by reason of any assessment or assessments made or to be made by the inspector, the amount of preliminary tax for the chargeable period specified in a notice given to the chargeable person under subsection (1), or the excess, if any, of that amount over the preliminary tax paid by the chargeable person for the chargeable period, shall not be payable.

(4) Where the chargeable person defaults in delivering a return for a relevant chargeable period to which a notice of preliminary tax under subsection (1) relates and the amount of preliminary tax specified in the notice, as increased under the provisions of section 48 of the Finance Act, 1986 , is greater than the amount, if any, of the preliminary tax paid by the chargeable person under section 11 , as also increased under the provisions of the said section 48, subsection (3) shall, with effect from the specified return date for the chargeable period, not apply to that chargeable person for the chargeable period and the amount of preliminary tax specified in the notice, as increased under the provisions of the said section 48 but reduced by any preliminary tax paid by the chargeable person in the capacity to which the notice relates for the chargeable period, shall become due and payable in all respects as if subsection (3) had not been enacted.

(5) Notwithstanding the foregoing provisions of this section, an amount of preliminary tax, or any excess of that amount over the amount, if any, of the preliminary tax paid by the chargeable person for the relevant chargeable period to which the notice relates, specified in a notice given under subsection (1) shall cease to be due and payable as on and from the date on which the inspector makes an assessment on the chargeable person for that relevant chargeable period:

Provided that, where action for the recovery of an amount of preliminary tax specified in a notice given under subsection (1), being action by way of the institution of proceedings in any court or the issue of a certificate under section 485 of the Income Tax Act, 1967 , has been taken, this subsection shall not apply to that amount of preliminary tax.

(6) Subject to the foregoing provisions of this section, the amount of preliminary tax specified in a notice given under subsection (1) shall be collected and paid in all respects as if it were tax charged by an assessment in respect of which no appeal was pending. Section 113 of the Finance Act, 1986 , shall apply in all respects to an amount of preliminary tax specified in a notice under subsection (1) as if it were an amount of tax specified in an assessment. Section 537 of the Income Tax Act, 1967 , shall apply to preliminary tax specified in a notice as it applies to tax specified in an assessment.

(7) Where the amount of preliminary tax paid by a chargeable person for any chargeable period exceeds his tax liability for that period, the excess shall be repaid and the amount repaid shall carry interest at the rate at which it would carry interest if it were an amount of tax repaid under the provisions of section 30 (4) of the Finance Act, 1976 :

Provided that—

(a) interest shall not be payable under this subsection if it amounts to less than £10, and

(b) income tax shall not be deductible on payment of interest under this subsection and such interest shall not be reckoned in computing income for the purposes of the Tax Acts.

(8) Where for a relevant chargeable period a notice of preliminary tax has been given to a person by the inspector and the inspector is satisfied that—

(a) the person being a chargeable person has discharged all his tax liability for the chargeable period,

(b) the person is not a chargeable person as respects that chargeable period, or

(c) it is appropriate to do so,

he may reduce the amount of preliminary tax specified in the notice given to the person to such amount, including nil, as the inspector deems appropriate having regard to the circumstances of the case.

(9) Where a provision of this section has the effect of providing that any preliminary tax specified in a notice under subsection (1) ceases to become payable, the provision shall not have the effect of removing from any chargeable person an obligation imposed upon him by section 11 to pay an amount of preliminary tax.

(10) Section 190 of the Income Tax Act, 1967 , shall, with any necessary modifications, apply to notices of preliminary tax under this section as it applies to assessments.