Revenue Note for Guidance

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Revenue Note for Guidance

PART 41

SELF ASSESSMENT

Overview

Part 41 is the legislative basis for the Self Assessment system of taxation, covering persons liable to income tax (other than PAYE), corporation tax and capital gains tax, for tax years and accounting periods up to, and including, 2012. As respects the tax year 2013 (and subsequent years) and accounting periods of companies that start on or after 1 January 2013, the provisions of Part 41A apply.

In essence, the system places the onus on the taxpayer to meet his/her obligations correctly and on time without any prompting from Revenue. Part 41 sets out the rules of the system and the obligations on the taxpayer to pay tax and make returns by specified dates.

For income tax and corporation tax purposes, a pay and file system operates with preliminary tax being paid in advance. For capital gains tax purposes, a system of payment in advance of the date for making the return operates.

In the case of income tax, this means that a taxpayer, to avoid surcharge, interest and penalties, must by the return filing date in any year have —

  • met his or her preliminary tax payment obligations for that tax year; and
  • filed his or her income tax return for the previous year and paid any balance of tax due for that year.

These requirements apply whether or not Revenue has made an assessment to tax on the taxpayer by the return filing date.

Similar requirements apply for corporation tax purposes in relation to the accounting periods of companies. (There are some variations in relation to the payment of preliminary tax by large and small companies).

As respects capital gains tax due, in respect of disposals made in the tax year 2009 and subsequent years, the relevant payment dates are 15 December in the year of assessment, for disposals made in the period 1 January to 30 November, and 31 January in the following year of assessment for disposals made in December of the year of assessment.

950 Interpretation (Part 41)

(1) A number of words and phrases are defined for the purposes of Part 41, including:

“chargeable period” is an accounting period of a company for corporation tax purposes, or a year of assessment for income tax and capital gains tax purposes.

“chargeable person”: This defines the classes of taxpayers who are within the ambit of the Self Assessment system. Included is any person who is chargeable to tax for a chargeable period whether on the person’s own account or that of another person. Persons not chargeable to tax are excluded as are those with PAYE income only. Also excluded are persons with PAYE income and small amounts of income from non-PAYE sources “coded in” against the person’s tax credits or taken into account in determining his or her standard rate cut-off point. In deciding whether to “code in” non-PAYE source income, the Revenue Commissioners may have regard to the gross amount of such income. Also excluded are persons chargeable solely to tax by virtue of a number of provisions providing for deduction at source of tax at the standard rate of income tax.

However, PAYE taxpayers who are company directors or, if jointly assessed under section 1017 or 1031C, whose spouses or civil partners are company directors, are chargeable persons and thus within the Self Assessment system unless the company is effectively dormant or a shelf company. [In practice, this provision is modified so as to exclude certain categories of directors from the definition of chargeable person and hence from the obligation to make a return under section 951 – see Statement of Practice SPIT/1/93 – “Finance Act, 1992 and Directors”.]

(1) & (1A) “specified return date for the chargeable period” is the date by which the taxpayer must make a return of income, profits or gains for a chargeable period. In the case of income tax and capital gains tax, the return must be made on or before 31 October in the tax year after the tax year to which the return relates. In the case of a company, the general position is that a return must be made within 9 months of the end of the company’s accounting period, but where this period ends after day 21 of the month in which this period ends, the return must be filed by day 21 of that month. Where the return and any payment are both made by electronic means the due date is extended from day 21 of that month to day 23 of that month. Where either the return or payment is made electronically but after day 23 of that month, the due date reverts to the specified return date for the chargeable period as provided for in subsection (1).

“tax” is income tax, corporation tax or capital gains tax, where appropriate.

(2) Except where expressly provided, the provisions of this Part have primacy over any other provision of the Tax Acts or Capital Gains Tax Acts. Generally, therefore, the Self Assessment provisions are not to be overruled by any other provision.

(3) Express provision is made for situations where obligations might be imposed on a person in more than one capacity.

Relevant Date: Finance Act 2019