Revenue Note for Guidance

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Revenue Note for Guidance

865 Repayment of tax

Summary

Section 865 provides for a general right to repayment of tax overpaid, subject to a 4-year claim limitation period.

Details

Definitions

(1)(a) The terms “Acts”, “chargeable period”, “correlative adjustment”, “tax” and “valid claim” are defined both for the purposes of the section and section 865A.

Valid Claim

(1)(b) For the purposes of subsection (3), a claim to repayment will be regarded as a valid claim where:

  1. a statement or return which the taxpayer is required to furnish under the Acts, contains all the information which Revenue would reasonably require to determine the amount, if any, of the repayment and the repayment arises out of an assessment made, or that would have been made, at the time the statement or return is delivered, on foot of the statement or return.
  2. such a statement or return is either not required or it does not contain all the necessary information, when all that information is furnished, and
  3. a correlative adjustment is concerned, when the amount of the adjustment is agreed by the two States.

Right to repayment

(2) Subject to the provisions of the section, where a taxpayer overpays tax which, for whatever reason including a mistake or error in a return or statement made for the purposes of an assessment, he was not obliged to pay, then the taxpayer is entitled to repayment of it.

(2A) Where the taxpayer is making a claim for repayment of tax because of an error or a mis-take, then they must amend the tax return, in accordance with section 959V, to correct that error or mistake.

(2B) Where the taxpayer must amend a tax return to correct an error or mistake for a period before Part 41A commenced, then section 959V is applied with certain modification, e.g. references to returns and self-assessments are taken to just be references to returns as self-assessments did not exist.

(3) A repayment of tax under the section will only be due when a valid claim is received.

(3A) However, the Revenue Commissioners may, in the absence of a valid claim, repay tax deducted under PAYE in a case where they are satisfied that tax has been overpaid. [This does not apply in the case of Self Assessment taxpayers with PAYE income as they continue to have to make a claim for any overpaid tax]. Under this derogation the Revenue Commissioners may not make a repayment at a time at which a claim for the repayment would not be allowed i.e. after 4 years from the end of the chargeable period to which the repayment relates.

Time Limits

(4) In general, claims for repayment of tax in relation to any chargeable period beginning on or after 1 January 2003 must be made within 4 years after the end of the chargeable period to which the claim relates. A similar time limit applies to claims made on or after 1 January 2005 in relation to earlier periods.

(5) However, if a right to repayment arises under another provision of the Acts and —

  1. that provision provides for a shorter time limit for repayment than the 4-year limit, then that shorter time limit applies to the claim, and
  2. that provision provides for a longer time limit than the 4-year limit, then the 4-year limit applies.

Section 959V provides for certain timeframes within which a taxpayer can amend a return and self assessment and these are relevant in the context of claims for repayment arising from errors or mistakes in the original return or self assessment.

(6) Except as provided for by the Acts, including sections 865 and 865A, the Revenue Commissioners may not make a repayment of tax or pay interest on such a repayment. This ensures that any common law right to repayment or interest does not apply.

(7) Where a person is unhappy with a decision made by Revenue in respect of a claim, the person may appeal the decision by notice in writing to the Appeal Commissioners. The appeal must be made within 30 days after the date of the notice of the decision. The ap-peal is heard and determined in the manner provided for in Part 40A.

(8) The Revenue Commissioners may repay tax directly to a specified bank account nominated by the taxpayer.

(9) The Revenue Commissioners can review any claim, subsequent to it having been repaid.

They can use the powers and rights given to them in Chapter 5 of Part 41A (section 954 or 955 for earlier periods) or section 960Q to examine claims made and raise assessments or determinations and seek repayment of any amounts paid to the taxpayer.

(10) The Revenue Commissioners may repay tax to a successor company or companies, where a valid claim is made, in respect of tax overpaid by a transferor company following a merger or division undertaken in accordance with the Companies Act 2014. Where there is more than one successor company, any repayment of tax shall be apportioned on a just and reasonable basis. The amount of any repayment of tax to a successor company or companies shall not exceed the total amount that would have been repayable to a transferor company. This subsection applies from 1 June 2015.

Relevant Date: Finance Act 2020