904F Power of inspection: claims by qualifying lenders

Summary

Under the tax relief at source (TRS) arrangements individuals deduct a percentage equal to the standard rate when paying mortgage interest to mortgage lenders. The lenders, in turn, claim repayment of equivalent amounts from the Revenue Commissioners. This section enables the Revenue Commissioners to audit claims for repayments by mortgage lenders to ensure that these are correct. To ensure that the relief at source arrangements are being complied with, the Revenue Commissioners can check procedures relating to the vouching of claims and they are also permitted to examine, on a sample basis, underlying records to ensure that the procedures are both adequate and observed and that claims from individuals are valid.

Details

(1) “authorised officer” means a person authorised in writing by the Revenue Commissioners to exercise the powers conferred by this section.

“books, records or other documents” includes any records used in the business of the mortgage lender, documents and correspondence and records of other communications between a mortgage lender and an individual borrower.

“qualifying lender” and “qualifying mortgage loan” are defined by reference to their meanings in section 244A.

(2) An authorised officer may enter, at all reasonable times, any premises or place of business of a mortgage lender to audit claims for repayment made by that lender of sums deducted by individuals under the TRS arrangements.

The audit procedures can include—

• examination of the procedures adopted by the mortgage lender relating to the vouching of claims,
• (3) checking a sample of the cases in respect of which a claim has been made to determine whether those procedures have been observed and are adequate.

(4) The authorised officer can require the lender or its employees to produce books, documents and records, to give information and explanations and to afford reasonable assistance in carrying out his or her duties.

(5) An authorised officer may make extracts from, or copies of, books, documents and records of the mortgage lender or require that copies be made available to him or her in carrying out his or her duties under the section.

(6) The authorised officer is to produce proof of authorisation on request.

(7) An employee of a mortgage lender is liable to a penalty of €1,265 for failure to comply with the requirements of an authorised officer in the exercise or performance of his or her powers or duties.

(8) Where the mortgage lender fails to comply, the penalty is €19,045 with a further penalty of €2,535 for each day that the failure continues.

Relevant Date: Finance Act 2019