Revenue Note for Guidance
This section authorises the Revenue Commissioners to attach amounts owed by a third party to a taxpayer who has defaulted in paying income tax (including employer’s PAYE), corporation tax, capital gains tax, capital acquisitions tax, stamp duties, customs duties, excise duties, local property tax or value-added tax. The power of attachment also extends, by virtue of the general application of income tax collection procedures to the collection of various other contributions to the State, to amounts owed by taxpayers in respect of PRSI (employment) contributions, self-employed PRSI contributions, health levies and employment and training levies.
Essentially, the section provides that where the Revenue Commissioners have reason to believe that a third party, including a financial institution, has an amount of money due to a defaulting taxpayer, they may direct the third party to pay to them the lesser of —
Notices of attachment can be issued electronically by the Revenue Commissioners.
(1)(a) “the Acts” are the Customs Acts, the statutes relating to the duties of excise, the Tax Acts (that is the Income Tax Acts and the Corporation Tax Acts), the Capital Gains Tax Acts, the Value-Added Tax Consolidation Act 2010, the Capital Acquisitions Tax Consolidation Act 2003, the Stamp Duties Consolidation Act 1999, Finance (Local Property Tax) Act 2012, Part 18A (income levy), Part 18B (parking levy in urban areas), Part 18C (domicile levy) and Part 18D (universal social charge). Also included are the various enactments extending or amending the Value-Added Tax Consolidation Act 2010, the Capital Acquisitions Tax Consolidation Act 2003 and the Stamp Duties Consolidation Act 1999. In addition, any instrument (for example, an order or a regulation) made under any of the preceding Acts is included in the definition.
“additional debt” is any amount which, at any time after a relevant person (essentially the debtor of the defaulting taxpayer) has received a notice of attachment but before the end of the relevant period relating to the notice (that is, the period for which the notice of attachment remains in force), would be a debt due by the relevant person to the taxpayer if the notice were received by the relevant person at that time. The purpose here is to ensure that debts which accrue to the taxpayer after a notice of attachment is served but before the notice expires are capable of being attached.
“debt” is the amount or aggregate amount of any money which, at the time the notice of attachment is received by the relevant person, is due by the relevant person (either directly or indirectly) to the taxpayer.
(1)(b) & (e) Where the relevant person is a financial institution, any amount held on deposit for the taxpayer’s sole benefit or held jointly with another person is regarded as a debt due to the taxpayer. In the case of joint deposits, unless contrary evidence is produced within 10 days of the giving of a notice by the financial institution to all parties to the joint deposit, the deposit is deemed to be held equally by all such parties. Only so much of a joint deposit which is either shown to be held for the benefit of the taxpayer or is deemed to be so held is regarded as a debt due by the financial institution to the taxpayer.
(1)(c) Any amount due by the relevant person to the taxpayer as emoluments, after statutory deductions, under a contract of service may be subject to a notice of attachment. In the situation, the notice of attachment may specify that the debt is to be recovered over a period specified in the notice.
(1)(d) Where there is a dispute as to the amount due by the relevant person to the taxpayer, the amount in dispute is disregarded for the purposes of determining the size of the debt.
(1)(a) “deposit” is a sum of money paid to a financial institution on terms under which it is to be repaid with or without interest and either on demand or at a time or in circumstances agreed by, or on behalf of, the person making the payment and the financial institution to whom the payment is made.
“emoluments” are anything assessable to income tax under Schedule E.
“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by all subsequent amendments to that Agreement.
“EEA state” means a state which is a contracting party to the EEA Agreement.
“financial institution” means a person who holds or has held a licence granted by the Central Bank, or a person who holds or has held a corresponding licence under the law of another EEA state, authorising them to carry on banking business in the State, or a person who is exempt under section 7(4) of the Central Bank Act 1971 from the requirement to hold a licence (this reference encompasses, for example, the Post Office Savings Bank, Building Societies, Industrial and Provident Societies and Credit Unions), a European credit institution authorised by the Central Bank to carry on business in the State and a branch of a financial institution which records deposits in its books as liabilities of the branch.
“further return” is a further return of an additional debt due by the relevant person to the taxpayer. The further return is to be made where an additional debt accrues to the taxpayer after receipt of a notice of attachment by a debtor of the taxpayer (see subsection (4)).
“interest on unpaid tax” is the interest that has accrued to the date on which a notice of attachment is given under any provision of the Acts providing for the charging of interest in respect of the unpaid tax or taxes specified in the notice of attachment, and includes interest on an undercharge of tax which is attributable to fraud or neglect.
“notice of attachment” is defined in subsection (2).
“notice of revocation” is defined in subsection (10).
“penalty” is a monetary penalty imposed on a taxpayer under a provision of the Acts.
“relevant period” is the period for which the notice of attachment remains in force. It starts when the notice is received by the relevant person and ends on the earliest of —
“relevant person” is a person whom the Revenue Commissioners believe may have, at the time the notice of attachment is received by that person, a debt due to the taxpayer.
“return” is a return to the Revenue Commissioners of a debt due by the relevant person to the taxpayer under subsection (2)(a)(iii).
“specified amount” is defined in subsection (2).
“tax” means any tax, duty, levy or charge under the care and management of the Revenue Commissioners.
“taxpayer” is a person who is liable to pay, remit or account for tax to the Revenue Commissioners.
A notice of attachment, notice of revocation and any other notice provided for by this section may be given to a taxpayer or a relevant person electronically.
(2)(a), (b) & (d) Where a taxpayer is in default in the payment of tax (including interest and penalties – in the remainder of this note the phrase “tax” is used to denote unpaid tax, interest and penalties) the Revenue Commissioners may issue a notice of attachment to a relevant person containing details of the taxpayer’s name and address and the total amount or, in a case where more than one notice of attachment is issued to relevant persons, a portion of the total amount of tax in default. The option is available to the Revenue Commissioners to issue more than one notice of attachment in respect of the one taxpayer. Where this is done, the aggregate of the amounts set out in such notices of attachment cannot exceed the aggregate amount of tax actually in default.
The notice of attachment must also contain a direction to the relevant person requiring a return to be made, within 10 days from the receipt of the notice, specifying whether or not a debt or debts is due to the taxpayer and, if so, the amount of such debts. The amount of the debts due up to the amount specified in the notice of attachment must be paid to the Revenue Commissioners within 10 days of the receipt of the notice. The relevant person is obliged to comply with the direction contained in the notice of attachment.
(2)(c) & (e) Where the relevant person is a financial institution and the debt owed to the taxpayer is part of a joint account, the financial institution must on receipt of a notice of attachment issue a notice to the joint account holders stating —
This notice must inform the parties to the account that a notice of attachment in respect of the taxpayer has been received and that, unless evidence to the contrary is produced within 10 days of the issue of the notice, the joint deposit is deemed to be held for the benefit of each party equally and an amount equal to the amount of the taxpayer’s share of the deposit up to the amount specified in the attachment notice or the amount of the taxpayer’s share of the deposit (whichever is the lesser) will be paid to the Revenue Commissioners.
(3) Before a notice of attachment may issue, the amount of tax in default must be in default for at least 14 days and the Revenue Commissioners must have given the taxpayer a written notice not later than 7 days before the issue of the notice of attachment to the effect that if the amount of tax in default is not paid it may be subject to attachment.
(4) Where a relevant person receives a notice of attachment in respect of a taxpayer and at that time the debt due to the taxpayer is less than the amount of the taxpayer’s default of tax as entered in the notice, or there is no such debt due, and subsequent to this but before the end of the relevant period in relation to the notice an additional debt becomes due to the taxpayer, the relevant person must within 10 days of that additional debt becoming due make a further return to the Revenue Commissioners and pay over the amount of the additional debt. This procedure is to be applied in respect of every such additional debt becoming so due until the amount paid over by the relevant person equals the amount specified in the notice of attachment. If the amount of the latest debt so due exceeds the difference between the amount specified in the notice of attachment and the aggregate of the debts already paid over to the Revenue, the relevant person need only pay over so much of that debt as makes the aggregate of all the amounts paid over equal to the amount specified in the notice of attachment.
(5) Where a relevant person makes, either fraudulently or negligently, an incorrect return, section 1078 which provides for criminal penalties applies.
(6) A relevant person issued with a notice of attachment is prohibited from reducing the amount of the debt due to the taxpayer unless such reduction does not reduce the debt to an amount less than the amount of the taxpayer’s default, or unless the reduction is made pursuant to a court order. If the debt is otherwise reduced, it is treated as not having been reduced and the full amount is accordingly available for attachment and must be paid over by the relevant person.
(7) Sections 1052 and 1054 which provide for the imposition of monetary penalties for failure to make returns apply to a relevant person who fails to make a return required by a notice of attachment. A certificate by an officer of the Revenue Commissioners that a particular return was not received from a person will be accepted as evidence to that effect until the contrary is proved.
(8) Where a relevant person fails to pay to the Revenue Commissioners the amount specified in the return, the amount may, if a notice of revocation has not been issued, be sued for through the courts by way of civil proceedings by the Revenue Commissioners.
(9) A failure by a relevant person to make a return required by this section or pay the amount shown on the return to the Revenue Commissioners is not to be treated as a failure to which section 1078 applies.
(10) The Revenue Commissioners may revoke a notice of attachment at any time by notice in writing to the relevant person. Such a revocation is to be made without delay if the taxpayer has paid the amount in default to the Revenue Commissioners. Where a relevant person pays an amount to the Revenue Commissioners and at that time the taxpayer has already paid the amount in default, the amount paid by the relevant person is to be refunded without delay to the taxpayer by the Revenue Commissioners.
(11) The Revenue Commissioners must provide the taxpayer with a copy of a notice of attachment or a notice of revocation issued to a relevant person without delay.
(12) A relevant person is to notify the taxpayer in writing and without delay of the fact of the payment of an amount to the Revenue Commissioners, and the reason for the payment. The Revenue Commissioners must without delay notify the relevant person and the taxpayer of the receipt of such a payment.
(13) Where a relevant person pays to the Revenue Commissioners the whole or part of any debt or additional debt due to the taxpayer, the relevant person is acquitted and discharged of the amount paid as if it had been paid to the taxpayer.
(14) Where a relevant person is prohibited from making any disbursement out of a debt or additional debt due to a taxpayer, no action lies against that person in any court by reason of a failure to make such a disbursement.
(15) The secrecy obligations imposed on the Revenue Commissioners do not apply in relation to information contained in a notice of attachment.
(16) A notice of attachment in respect of a taxpayer is not to be given to a relevant person at any time when the taxpayer or relevant person is an undischarged bankrupt or a company being wound up.
(17) The Revenue Commissioners may delegate to any of their officers any of the functions and acts authorised by the section to be performed or discharged by the Revenue Commissioners.
Relevant Date: Finance Act 2019