Finance Act, 1986

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Surcharge for late submission of returns.

48.—(1) (a) In this section—

“return of income” means a return, statement, declaration or list which a person is required to deliver to the inspector by reason of a notice which is given by the inspector under any one or more of the specified sections;

“specified date” means, in relation to a return of income for a year of assessment or accounting period—

(i) (I) as respects the year 1986-87, the 31st day of December, 1987,

(II) as respects the year 1987-88 or any subsequent year of assessment, the 31st day of December in the year,

(III) as respects accounting periods ending in the year beginning on the 6th day of April, 1986, and ending on the 5th day of April, 1987, the 31st day of December, 1987, and

(IV) as respects accounting periods ending on or after the 6th day of April, 1987, the last day of the period of nine months commencing on the day next after the end of the accounting period, or

(ii) the last day of the period of six months commencing on the day next after the date on which the person is required by notice to deliver the return of income,

whichever is the later;

“specified sections” means—

(i) sections 70 , 94 (a), 94 (d), 169 , 170 , 172 and 197 of the Income Tax Act, 1967 ,

(ii) section 11 of the Finance Act, 1976 , and

(iii) section 143 of the Corporation Tax Act, 1976 ;

“tax” means income tax, corporation tax or capital gains tax as may be appropriate.

(b) For the purposes of this section—

(i) where a person fraudulently or negligently delivers an incorrect return of income on or before the specified date in relation to the return of income, he shall be deemed to have failed to deliver the return of income on or before that date unless the error in the return of income is remedied on or before that date,

(ii) where a person delivers an incorrect return of income on or before the specified date in relation to that return of income but does so neither fraudulently nor negligently and it comes to his notice (or, if he has died, to the notice of his personal representatives) that it is incorrect, he shall be deemed to have failed to deliver the return of income on or before the specified date in relation to the return of income unless the error in the return of income is remedied without unreasonable delay,

(iii) where a person delivers a return of income on or before the specified date in relation to the return of income but the inspector, by reason of being dissatisfied with any statement of profits or gains arising to the person from any trade or profession which is contained in the return of income, requires the person, by notice in writing served on him under section 174 of the Income Tax Act, 1967 , to do any thing, the person shall be deemed not to have delivered the return of income on or before the specified date unless he does that thing within the time specified in the notice,

(iv) references to such of the specified sections as are applied, subject to any necessary modifications, in relation to capital gains tax by paragraph 3 of Schedule 4 to the Capital Gains Tax Act, 1975 , shall be construed as including references to those sections as so applied, and

(v) references to a return of income for a year of assessment or in relation to a year of assessment shall be construed as references to a return of income requiring a statement or particulars of any income of the year ended on the 5th day of April immediately preceding the commencement of that year of assessment.

(2) Where, in relation to a year of assessment (being the year 1986-87 or any subsequent year of assessment) or accounting period (being an accounting period ending on or after the 6th day of April, 1986), a person who is required to deliver a return of income to the inspector fails to deliver the return of income, on or before the specified date in relation to the return of income, any amount of tax for that year of assessment or accounting period which, apart from this section, is or would be contained in an assessment to tax made or to be made on a person (hereafter in this subsection referred to as the “chargeable person”) who is chargeable to tax for that year of assessment or accounting period on or by reference to the whole or any part of the income, profits or chargeable gains which is contained in or returned in the return of income, or which would be so contained in or returned in the return of income if it were delivered, shall be increased by an amount (hereafter in this subsection referred to as the “surcharge”) equal to 10 per cent. of that amount of tax and, if the tax contained in the assessment to tax is not the amount of tax as so increased, all the provisions of the Tax Acts and the Capital Gains Tax Acts, apart from this section but including in particular those relating to the collection and recovery of tax and the payment of interest on unpaid tax, shall apply as if the tax contained in the assessment to tax were the amount of tax as so increased:

Provided that, in determining the amount of the surcharge, the tax contained in the assessment to tax shall be deemed to be reduced by the aggregate of—

(a) any tax deducted by virtue of any of the provisions of the Tax Acts or the Capital Gains Tax Acts from any income, profits or chargeable gains, charged in the assessment to tax in so far as that tax has not been repaid or is not repayable to the chargeable person and in so far as the tax so deducted may be set off against the tax contained in the assessment to tax,

(b) the amount of any tax credit to which the chargeable person is entitled in respect of any income, profits or chargeable gains charged in the assessment to tax, and

(c) any other amounts which are set off in the assessment to tax against the tax contained therein.