Representations have been made to me concerning the cash flow implications of the withholding tax. The withholding tax on professional services was introduced in 1987. It affects companies and the self-employed who offer professional services to the public sector. In effect what withholding tax does is to bring forward the payment of tax, resulting in a cash flow gain to the Exchequer. It does not impose any additional tax liability. Moreover, there are specific safeguards in the legislation. A system of interim refunds operates to ensure that deductions do not exceed the individual's liability in the previous tax year. Adjustments are made where the previous year's liability is unusually high and there are special considerations for individuals in their first year of operation.