Value-Added Tax Consolidation Act 2010

114

Interest payable by accountable persons.

[VATA s. 21]

114.—(1) Where any amount of tax becomes payable under F287[section 76, 77, 91C(4) or 91E(4)] and is not paid, simple interest on the amount shall be paid by the accountable person, and such interest shall be calculated from the date on which the amount became payable and at a rate of 0.0274 per cent for each day or part of a day during which the amount remains unpaid.

(2) Where an amount of tax is refunded to a person and—

(a) no amount of tax was properly refundable to that person under section 99(1), or

(b) the amount of tax refunded is greater than the amount properly refundable to that person under section 99(1),

then simple interest shall be paid by that person on any amount of tax refunded to that person which was not properly refundable to that person under section 99(1), from the date the refund was made, at the rate of 0.0274 per cent for each day or part of a day during which the person does not correctly account for any such amount refunded which was not properly refundable.

(3)(a) Subject to paragraph (b), where the amount of the balance of tax remaining to be paid in accordance with section 77(2)(b) and (c) by an authorised person referred to in section 77(5) (in this subsection referred to as the “balance”) represents more than 20 per cent of the tax which the authorised person became accountable for in respect of his or her accounting period, then, for the purposes of this subsection, that balance shall be deemed to be payable on a day (in this subsection referred to as the “accrual day”) which is 6 months prior to the final day for the furnishing of a return in accordance with section 77(2)(b) and simple interest in accordance with this section shall apply from that accrual day.

(b) Where an authorised person can demonstrate to the satisfaction of the Collector-General that the amount of interest payable on the balance, in accordance with this subsection, is greater than the sum of the amounts of interest which would have been payable in accordance with this section if—

(i) the authorised person were not so authorised,

(ii) the person had submitted a return in accordance with section 76(1) for each taxable period comprising the accounting period, and

(iii) the amounts which were paid by direct debit during a taxable period are deemed to have been paid on the due date for submission of that return for that taxable period,

then that sum of the amounts of interest is payable.

(4) Subsections (1) and (2) shall apply—

(a) to tax recoverable by virtue of a notice under section 110 as if the tax were tax which the person was liable to pay for the respective taxable period or periods comprised in the notice, and

(b) to tax recoverable by virtue of a notice under section 111 (whether a notice of appeal under that section is received or not) as if the tax were tax which the person was liable to pay for the taxable period or, as the case may be, the later or latest taxable period included in the period comprised in the notice.

Annotations

Amendments:

F287

Substituted (1.01.2015) by European Union (Value-Added Tax) Regulations 2014 (S.I. No. 340 of 2014), reg. 3(m), in effect as per reg. 2(1).

Modifications (not altering text):

C4

Application of section restricted by Taxes Consolidation Act 1997 (39/1997), s. 1080A, as inserted (1.08.2020) by Financial Provisions (Covid-19) (No. 2) Act 2020 (8/2020), s. 6, commenced on enactment.

Interest on overdue tax - supplementary provision

1080A. ...

(2) This subsection shall apply where—

(a) an agreement is entered into between a person and the Collector-General in relation to the payment by the person of declared liabilities under section 849, and

(b) the agreement was entered into, or the person requested that the Collector-General enter into the agreement, on or before 30 September 2020.

(3) Subject to subsection (6), where subsection (2) applies, the following provisions shall not apply to the declared liabilities from the date on which the interest determined in accordance with subsection (5) applies to the declared liabilities in accordance with subsection (4): ...

(s) section 114 of the Value-Added Tax Consolidation Act 2010 ;

(t) section 114A of the Value-Added Tax Consolidation Act 2010 ;

...

(4) Where subsection (2) applies, the declared liabilities shall carry interest from the later of—

(a) 1 August 2020, and

(b) the date on which the agreement referred to in subsection (2) is entered into, and the amount of that interest shall be determined in accordance with subsection (5).

(5) The interest to be carried by the declared liabilities referred to in subsection (4) shall be the amount determined by the formula—

DL x D x P

where—

DL is the amount of the declared liabilities which remains unpaid,

D is the number of days (including part of a day) forming the period of delay, and

P is 0.0082 per cent.

...

C5

Application of section restricted (1.01.2011) by Value-Added Tax Regulations 2010 (S.I. No. 639 of 2010), reg. 17(4), in effect as per reg. 1(2).

Apportionment

17. ...

(4) Where in accordance with paragraph (3) an accountable person adjusts the amount of tax deductible for a review period and, subsequent to that adjustment, it is established that adjustment was incorrect, then section 114 of the Act does not apply to any additional liability for tax arising out of the correction of that adjustment, but only if—

(a) that person, or any person acting on his or her behalf, did not act fraudulently or negligently in relation to that adjustment,

(b) that person submitted, by the due date for submission of the return referred to in paragraph (3)(c), details setting out the basis on which the adjustment was made to the office of the Commissioners which would normally deal with the examination of the records kept by that person in accordance with Chapter 7 of Part 9 of the Act, and

(c) that additional liability is not the subject of an assessment of tax under section 111 of the Act.