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SOLR_PROP

Finance Act 2005

Interest on certain overdue tax.

145.—(1) Chapter 5 of Part 47 of the Taxes Consolidation Act 1997 is amended by substituting the following for sections 1080 and 1081:

“Interest on overdue income tax, corporation tax and capital gains tax.

1080.—(1) In this section—

‘chargeable period’ has the same meaning as in section 321(2);

‘chargeable person’ has the same meaning as in section 950(1);

‘period of delay’, in relation to any tax due and payable, means the period during which that tax remains unpaid;

‘Table’ means the Table to subsection (2);

‘tax’ means income tax, corporation tax or capital gains tax, as appropriate;

‘relevant period’, in relation to a period of delay which falls into more than one of the periods specified in column (1) of the Table, means any part of the period of delay which falls into, or is the same as, a period specified in that column.

(2) (a) Subject to this section and section 1081—

(i) as respects tax due and payable for a chargeable period beginning before 1 January 2005, any tax charged by any assessment to tax shall carry interest from the date when the tax becomes due and payable until payment, and

(ii) as respects tax due and payable for a chargeable period beginning on or after 1 January 2005, any tax due and payable by a chargeable person for a chargeable period shall carry interest from the date when the tax becomes due and payable until payment,

and the amount of that interest shall be determined in accordance with paragraph (c).

(b) Subject to this section and section 1081, any tax charged by any assessment to income tax shall, notwithstanding any appeal against such assessment, carry interest from the date when, if there were no appeal against the assessment, the tax would become due and payable under section 960 until payment, and the amount of that interest shall be determined in accordance with paragraph (c).

(c) The interest to be carried by the tax referred to in paragraph (a) or (b), as the case may be, shall be—

(i) where one of the periods specified in column (1) of the Table includes or is the same as the period of delay, the amount determined by the formula—

T × D × P

where—

T is the tax due and payable which remains unpaid,

D is the number of days (including part of a day) forming the period of delay, and

P is the appropriate percentage in column (2) of the Table opposite the period specified in column (1) of the Table within which the period of delay falls or which is the same as the period of delay,

and

(ii) where a continuous period formed by 2 or more of the periods specified in column (1) of the Table, but not (as in subparagraph (i)) only one such period, includes or is the same as the period of delay, the aggregate of the amounts due in respect of each relevant period which forms part of the period of delay, and the amount due in respect of each such relevant period shall be determined by the formula—

T × D × P

where—

T is the tax due and payable which remains unpaid,

D is the number of days (including part of a day) forming the relevant period, and

P is the appropriate percentage in column (2) of the Table opposite the period specified in column (1) of the Table into which the relevant period falls or which is the same as the relevant period.

TABLE

(Period)

(1)

(Percentage)

(2)

From 6 April 1963 to 31 July 1971

0.0164%

From 1 August 1971 to 30 April 1975

0.0246%

From 1 May 1975 to 31 July 1978

0.0492%

From 1 August 1978 to 31 March 1998

0.041%

From 1 April 1998 to 31 March 2005

0.0322%

From 1 April 2005 to the date of payment

0.0273%

(3) The interest payable under this section—

(a) shall be payable without deduction of income tax and shall not be allowed as a deduction in computing any income, profits or losses for any of the purposes of the Tax Acts, and

(b) shall be deemed to be a debt due to the Minister for Finance for the benefit of the Central Fund and shall be payable to the Revenue Commissioners.

(4) Subject to subsection (5)—

(a) every enactment relating to the recovery of tax,

(b) every rule of court so relating,

(c) section 81 of the Bankruptcy Act 1988 , and

(d) sections 98 and 285 of the Companies Act 1963 ,

shall apply to the recovery of any amount of interest payable on that tax as if that amount of interest were a part of that tax.

(5) In proceedings instituted by virtue of subsection (4)—

(a) a certificate signed by an officer of the Revenue Commissioners certifying that a stated amount of interest is due and payable by the person against whom the proceedings were instituted shall be evidence until the contrary is proven that that amount is so due and payable, and

(b) a certificate so certifying and purporting to be signed as specified in this subsection 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.

Effect on interest of reliefs given by discharge or repayment.

1081.—(1) Subject to subsection (2)—

(a) where for any year of assessment or accounting period, as the case may be, relief from any tax referred to in section 1080(2) is given to any person by a discharge of any of that tax, such adjustment shall be made of the amount of interest payable under that section in relation to that tax, and such repayment shall be made of any amounts of interest previously paid under that section in relation to that tax, as are necessary to secure that the total sum, if any, paid or payable under that section in relation to that tax is the same as it would have been if the tax discharged had never been due and payable, and

(b) where relief from tax paid for any year of assessment or accounting period, as the case may be, is given to any person by repayment, that person shall be entitled to require that the amount repaid shall be treated for the purposes of this subsection to the extent possible as if it were a discharge of the tax charged on that person (whether alone or together with other persons) by any assessment for the same year or period; but the relief shall not be applied to any assessment made after the relief was given and shall not be applied to more than one assessment so as to reduce without extinguishing the amount of tax charged thereby.

(2) No relief, whether by discharge or repayment, shall be treated as affecting any tax charged by an assessment to—

(a) income tax or any income tax due and payable unless it is a relief from income tax,

(b) corporation tax or any corporation tax due and payable unless it is a relief from corporation tax, or

(c) capital gains tax or capital gains tax due and payable unless it is a relief from capital gains tax.”.

(2) Section 1082 of the Taxes Consolidation Act 1997 is amended by inserting the following after subsection (5):

“(6) This section shall not apply as respects any tax due and payable for a year of assessment or an accounting period beginning on or after 1 January 2005.”.

(3) Part 11 of the Stamp Duties Consolidation Act 1999 is amended by inserting the following after Chapter 7:

“Chapter 8

Calculation of interest on unpaid duty and other amounts

Calculation of interest on unpaid duty and other amounts.

159D.—(1) In this section—

‘period of delay’, in relation to any unpaid duty or other amount referred to in a specified provision, means the period referred to in the specified provision in respect of which period interest is chargeable, charged, payable or recoverable, as the case may be, in accordance with that provision;

‘specified provision’ means any section of this Act other than section 126(7) which provides for interest to be charged, chargeable, payable or recoverable, as the case may be, in respect of any unpaid duty or other amount due and payable under that section.

(2) The amount of interest charged, chargeable, payable or recoverable in respect of any unpaid duty or other amount due and payable or recoverable under a specified provision shall be the amount determined by the formula—

A × D × P

where—

A is the duty or other amount due and payable under the specified provision which remains unpaid,

D is the number of days (including part of a day) forming the period of delay, and

P is 0.0273 per cent.”.

(4) (a) Section 51 of the Capital Acquisitions Tax Consolidation Act 2003 is amended by substituting the following for subsection (2):

“(2)(a) Simple interest is payable, without the deduction of income tax, on the tax from the valuation date to the date of payment, and the amount of that interest shall be determined in accordance with paragraph (c).

(b) Interest payable in accordance with paragraph (a) is chargeable and recoverable in the same manner as if it were part of the tax.

(c) (i) In this paragraph—

‘period of delay’, in relation to any tax due and payable, means the period during which that tax remains unpaid;

‘relevant period’, in relation to a period of delay which falls into more than one of the periods specified in column (1) of Part 1 of the Table, means any part of the period of delay which falls into, or is the same as, a period specified in that column;

‘Table’ means the Table to this subsection.

(ii) The interest payable in accordance with paragraph (a), shall be—

(I) where one of the periods specified in column (1) of Part 1 of the Table includes or is the same as the period of delay, the amount determined by the formula—

T × D × P

where—

T is the tax due and payable which remains unpaid,

D is the number of days (including part of a day) forming the period of delay, and

P is the appropriate percentage in column (2) of the Table opposite the period specified in column (1) of Part 1 of the Table within which the period of delay falls or which is the same as the period of delay,

and

(II) where a continuous period formed by 2 or more of the periods specified in column (1) of Part 1 of the Table, but not (as in clause (I)) only one such period, includes or is the same as the period of delay, the aggregate of the amounts due in respect of each relevant period which forms part of the period of delay, and the amount due in respect of each such relevant period shall be determined by the formula—

T × D × P

where—

T is the tax due and payable which remains unpaid,

D is the number of days (including part of a day) forming the relevant period, and

P is the appropriate percentage in column (2) of Part 1 of the Table opposite the period specified in column (1) of Part 1 of the Table into which the relevant period falls or which is the same as the relevant period.

TABLE

Part 1

(Period)

(1)

(Percentage)

(2)

From 31 March 1976 to 31 July 1978

0.0492%

From 1 August 1978 to 31 March 1998

0.0410%

From 1 April 1998 to 31 March 2005

0.0322%

From 1 April 2005 to the date of payment

0.0273%

Part 2

(Period)

(1)

(Percentage)

(2)

From 8 February 1995 to 31 March 1998

0.0307%

From 1 April 1998 to 31 March 2005

0.0241%

From 1 April 2005 until the date of payment

0.0204%

(2A) For the purposes of calculating interest on the whole or the part of the tax to which section 55 applies, subsection (2) shall apply as if references in that subsection to Part 1 of the Table were references to Part 2 of the Table.”.

(b) Section 55 of the Capital Acquisitions Tax Consolidation Act 2003 is amended by substituting the following for paragraph (b) of subsection (2):

“(b) notwithstanding subsection (2) of section 51, the interest payable on that whole or part of the tax shall be determined—

(i) in accordance with that subsection as modified by subsection (2A) of that section, or

(ii) in such other manner as may be prescribed by the Minister for Finance by regulations,

instead of in accordance with subsection (2) of that section, and that section shall apply as regards that whole or part of the tax as if the interest so payable were determined under that section, but the interest payable on any overdue instalment of that whole or part of that tax, or on such part of the tax as would represent any such overdue instalment if that whole or part of the tax were being paid by instalments, shall continue to be determined in accordance with subsection (2) of section 51.”.

(5) (a) This subsection applies to interest payable under—

(i) section 18 (2) of the Wealth Tax Act 1975 ,

(ii) section 105 (1) of the Finance Act 1983 , and

(iii) section 117 of the Finance Act 1993 .

(b) Where any interest to which this subsection applies is chargeable on or after 1 April 2005 in respect of tax due to be paid whether before, on or after that date, then such interest shall, notwithstanding the provisions of any other enactment, be chargeable at the rate of 0.0273 per cent per day or part of a day instead of at the rate specified in that other enactment and the sections referred to in paragraph (a) shall have effect as if for interest so chargeable that rate were substituted for the rate specified in each of those sections.

(6) (a) The provisions set out in paragraph (b) are, in so far as they are not already repealed, repealed with effect from 1 April 2005 to the extent that they apply to interest chargeable or payable on income tax, corporation tax, capital gains tax, gift tax and inheritance tax that has not been paid before that date regardless of when that tax became due and payable.

(b) The provisions referred to in paragraph (a) are—

(i) section 14 of the Finance Act 1962 ;

(ii) sections 550 , 551 and 552 of the Income Tax Act 1967 ;

(iii) section 17 of the Finance Act 1971 ;

(iv) section 28 of the Finance Act 1975 ;

(v) section 41 of the Capital Acquisitions Tax Act 1976 ;

(vi) sections 43 and 46 of the Finance Act 1978 ;

(vii) the provisions of section 1083 of the Taxes Consolidation Act 1997 except in so far as they apply section 1082 of that Act to capital gains tax;

(viii) section 133 of the Finance Act 1998 ; and

(ix) section 129 of the Finance Act 2002 .

(7) (a) In each provision of the Taxes Consolidation Act 1997 set out in column (1) of Part 1 of Schedule 5 for the words in that provision which are set out in column (2) of that Part there shall be substituted the words set out opposite the entry in column (3) of that Part.

(b) In each provision of the Stamp Duties Consolidation Act 1999 set out in column (1) of Part 2 of Schedule 5 for the words in that provision which are set out in column (2) of that Part there shall be substituted the words set out opposite the entry in column (3) of that Part.

(8) (a) Subsections (1) and (7)(a) apply to any unpaid income tax, corporation tax or capital gains tax, as the case may be, that has not been paid before 1 April 2005 regardless of when that tax becomes due and payable and notwithstanding anything to the contrary in any other enactment other than section 1082 of the Taxes Consolidation Act 1997 , but subsection (1) shall not apply to the part, if any, before 1 January 1963 of any period of delay (within the meaning of section 1080 of that Act as substituted by this section).

(b) Subsection (2) applies and shall be deemed to have always applied from 1 January 2005.

(c) Subsections (3) and (7)(b) apply as respects interest to be charged, chargeable, payable or recoverable, as the case may be, for any day or part of a day on or after 1 April 2005 in respect of any unpaid stamp duty or other amount due under the Stamp Duties Consolidation Act 1999 which is due to be paid whether before, on or after 1 April 2005.

(d) Subsection (4) applies to any unpaid gift tax or inheritance tax, as the case may be, that has not been paid before 1 April 2005 regardless of when that tax becomes due and payable and notwithstanding anything to the contrary in any other enactment.