Finance Act, 1992

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Obligation to keep certain records.

231.—Part I of the Finance Act, 1968 , is hereby amended by the substitution of the following section for section 6:

“6.—(1) In this section—

‘linking documents’ means documents that are drawn up in the making up of accounts and which show details of the calculations linking the records to the accounts;

‘records’ includes accounts, books of account, documents and any other data maintained manually or by any electronic, photographic or other process, relating to—

(a) all sums of money received and expended in the course of the carrying on or exercising of a trade, profession or other activity and the matters in respect of which the receipt and expenditure take place,

(b) all sales and purchases of goods and services where the carrying on or exercising of a trade, profession or other activity involves the purchase or sale of goods or services,

(c) the assets and liabilities of the trade, profession or other activity referred to in paragraph (a) or (b), and

(d) all transactions which constitute an acquisition or disposal of an asset for capital gains tax purposes.

(2) (a) Every person who, on his own behalf or on behalf of any other person, carries on or exercises any trade, profession or other activity the profits or gains of which are chargeable under Schedule D, or who is chargeable to tax under Schedule D or Schedule F in respect of any other source of income, or who is chargeable to capital gains tax in respect of chargeable gains, shall keep, or cause to be kept on his behalf, such records as will enable true returns to be made, for the purposes of income tax and capital gains tax, of such profits or gains or chargeable gains.

(b) The records shall be kept on a continuous and consistent basis, that is to say the entries therein shall be made in a timely manner and be consistent from one year to the next.

(c) Where accounts are made up to show the profits or gains from any such trade, profession or activity or in relation to a source of income, of any person, that person shall retain, or cause to be retained on his behalf, linking documents.

(d) Where any such trade, profession or other activity is carried on in partnership, the precedent partner, within the meaning of section 69 of the Income Tax Act, 1967 , shall, for the purposes of this section, be deemed to be the person carrying on that trade, profession or other activity.

(3) Records required to be kept or retained by virtue of this section, shall be kept—

(a) in written form in an official language of the State, or

(b) subject to section 113 (2) of the Finance Act, 1986 , by means of any electronic, photographic or other process.

(4) Linking documents and records kept pursuant to the preceding provisions of this section shall be retained by the person required to keep the records for a period of 6 years after the completion of the transactions, acts or operations to which they relate or, in the case of a person who fails to comply with section 10 (1) of the Finance Act, 1988 , requiring the preparation and delivery of a return on or before the specified return date for a year of assessment, until the expiry of a period of 6 years from the end of the year of assessment in which a return has been delivered showing the profits or gains or chargeable gains derived from the said transactions, acts or operations:

Provided that, this subsection shall not—

(a) require the retention of linking documents and records in respect of which the inspector notifies in writing the person who is required to retain them that retention is not required, or

(b) apply to the books and papers of a company which have been disposed of in accordance with section 305 (1) of the Companies Act, 1963 .

(5) Any person who fails to comply with the provisions of subsection (2), (3) or (4) in respect of any records or linking documents in relation to a return for any year of assessment shall be liable to a penalty of £1,200:

Provided that a penalty shall not be imposed under this subsection if it is proved that no person is chargeable to tax in respect of the profits or gains for that year of assessment.”.