Section 865 of the Taxes Consolidation Act 1997, providing for a statutory general right to repayment of tax as well as payment of interest, subject to a four year time limit, was originally introduced in 2003. It provides that no repayment may be made based on claims submitted more than four years after the end of the period to which they relate. Prior to that there was no statutory right to repayment, though a taxpayer could sue for repayment under common law.
The Minister at the time indicated that, in introducing the new arrangements, he was satisfied that they achieved the necessary balance between establishing a fair and uniform system for taxpayers while providing necessary protection for the Exchequer.
At the same time, the general right of the Revenue Commissioners to raise assessments or make enquiries as respects taxpayer returns was also reduced to four years, though in certain circumstances, for example, where fraud or neglect is suspected or in the context of the application of general anti-avoidance rules, Revenue's right to enquire etc. is not time limited. Previously, the general time limit on the raising of assessments by Revenue had been ten years.
The convergence of these various time limits on four years creates parity between a taxpayer's right to repayment and Revenue's powers to raise assessments.
In response to recent representations on the issue I indicated that I would, without commitment, instruct my officials to examine the issue in the context of the Budget and Finance Bill process. However, in the light of this examination no change has been recommended.
