Finance Act, 1986

Liability to tax, etc., of holder of fixed charge on book debts of company.

115.—(1) Where a person holds a fixed charge (being a fixed charge which is created on or after the passing of this Act) on the book debts of a company (within the meaning of the Companies Act, 1963 ) and the company fails to pay any relevant amount for which it is liable, then the said person shall, on being notified accordingly in writing by the Revenue Commissioners, become liable to pay such relevant amount on due demand, and on neglect or refusal of payment may be proceeded against in like manner as any other defaulter:

Provided that—

(i) the amount or aggregate amount which the person shall be liable to pay in relation to a company in accordance with this section shall not exceed the amount or aggregate amount which that person has, while the fixed charge on book debts in relation to the said company is in existence, received, directly or indirectly, from that company in payment or in part payment of any debts due by the company to that person, and

(ii) this section shall not apply to any amounts received by the holder of the fixed charge from the company before the date on which he is notified in writing by the Revenue Commissioners that he is liable by reason of this section for payment of a relevant amount due by the company.

(2) In this section “relevant amount” means any amount which the company is liable to remit—

(a) under Chapter IV of Part V of the Income Tax Act, 1967 , and

(b) under the Value-Added Tax Act, 1972 .