Chapter 2 – Estimation, assessment and time limits

110. Estimation of tax due

Summary

This section enables Revenue to enforce payment of tax against an accountable person who has failed to submit his or her return for any period within the prescribed time after the end of such period. This is done by means of an estimate of the tax due, notice of which is served on the taxpayer. Estimates can be issued for a higher amount where Revenue finds, on the basis of new information becoming available, that the first estimate is insufficient.

The person has a right of appeal against any such estimate on the grounds that he or she is not an accountable person. The appeal must be lodged in accordance with section 949I of the Taxes Consolidation Act 1997 within the period of 30 days after the date of the formal notice of the estimate. Apart from this, a person may displace the estimate by submitting a return and paying the tax due together with interest and any costs.

Details

(1) If an accountable person fails to submit his/her return for any period within the prescribed time limit, Revenue may estimate the amount of tax payable by him/her in respect of that period and may serve notice on him/her setting out the amount so estimated.

Subsequent estimates can be issued where the original estimate is either too low or too high provided that Revenue is satisfied that the first estimate is insufficient on the basis of new information becoming available. Second estimates can be raised where the first estimate has issued but a VAT return has not been furnished and information becomes available at a later date that suggests that the original estimate was inaccurate.

(2) The provisions that follow the making of an estimate and the issue of a notice under subsection (1) are as follows:

• – Paragraph (a) provides for an appeal, by a person who claims that he/she is not an accountable person, within the period of 30 days after the date of the notice for a determination on whether he or she is an accountable person.
• – Paragraph (b) provides that if there is no appeal, or if there is an appeal that the appellant loses, the tax shown on the estimate is recoverable in the same manner as if the person had put in a return at the proper time and the return had shown the estimated tax as due.
• – Paragraph (c) provides that where a person, after the service of a notice, furnishes a return in respect of the period specified in the notice and pays tax, interest and costs which have been incurred in connection with the default, the notice is discharged and the person may claim a refund of any excess tax which may have been paid on foot of the notice, subject to the 4-year time limit.

(3) Revenue is authorised to include notice of estimates for 2 or more taxable periods on the same form.

Regulation 41(1) of the VAT Regulations 2010 deals with estimation.

Relevant Date: Finance Act 2020