Revenue Note for Guidance

CHAPTER 5 Interest on overdue tax

Overview

This Chapter charges interest in respect of overdue income tax, corporation tax and capital gains tax in normal circumstances and in cases where there is fraud or neglect. Provision is also made for the adjustment of interest paid where tax is revised by discharge or repayment due to the application of a tax relief.

1080 Interest on overdue income tax, corporation tax and capital gains tax

Summary

This section provides the mechanism for the calculation of the interest payable on outstanding income tax, corporation tax and capital gains tax in respect of a given period of default.

Details

(1) A number of terms used in the section, including “chargeable period”, “chargeable person”, “period of delay” and “relevant period”, are defined.

(2)(a) & (c) The mechanism for the calculation of the interest payable on outstanding income tax, corporation tax and capital gains tax in respect of a given period of default is set out. Interest is charged for each day or part of a day the tax remains unpaid from the date when the tax became due and payable until payment. The interest charge is calculated in different ways depending on whether the period during which the tax remains unpaid falls wholly within one of the time periods set out in the Table (see below) or whether it falls into two or more of such periods.

Where the period during which the tax remains unpaid falls into one such period the interest charge is calculated on the basis of multiplying the tax due by the appropriate percentage set out in the Table opposite the corresponding period during which the tax remains unpaid and then multiplying the answer by the number of days or parts of days the tax remains unpaid.

Where the tax remains unpaid for a period of time which falls into more than one of the periods set out in column (1) of the Table, then the interest is calculated separately (as per the preceding paragraph) for each such period. The resultant amounts are then aggregated to give the total amount of interest payable for the full period of delay.

**TABLE**
(Period)	(Percentage)
(1)	(2)
From 6 April 1963 to 31 July 1971	0.0164%
From 1 August 1971 to 30 April 1975	0.0246%
From 1 May 1975 to 31 July 1978	0.0492%
From 1 August 1978 to 31 March 1998	0.0410%
From 1 April 1998 to 31 March 2005	0.0322%
From 1 April 2005 to 30 June 2009	0.0273%
From 1 July 2009 to the date of payment	0.0219%

(2)(b) For 1 January 2011 and subsequent years interest shall be charged on any underpayment arising on foot of the issue of a notice of assessment or a PAYE Balancing Statement. The interest rate to apply is calculated in accordance with the formula set out in section 1080(2)(c).

The due date for collection of the undercharge is in accordance with section 960.

(3) The interest is paid gross (that is, it is not subject to deduction of tax on payment) and is not allowed as a deduction in computing for tax purposes any income, profits or gains. The interest is deemed to be a debt due to the Minister for Finance for the benefit of the Central Fund and is payable to the Revenue Commissioners.

(4) The machinery for the recovery of tax charged and the rules of court relating to the recovery of tax apply to the recovery of unpaid interest as if such interest were part of the tax. In addition, unpaid interest ranks equally with unpaid tax in relation to priority of debts in bankruptcy or liquidation proceedings.

(5) In any proceedings for the recovery of interest, a certificate signed by an officer of the Revenue Commissioners stating that the amount of interest is due is evidence that such amount is due until the contrary is proven. Any certificate that purports to be so signed may be submitted in evidence without proof and is deemed to have been so signed until the contrary is proved.

Relevant Date: Finance Act 2019