Vol. 473 No. 1
82 Mr. Haughey asked the Minister for Finance why interest can be paid by the Revenue Commissioners to self-employed taxpayers who have overpaid tax, whereas interest cannot be paid by the Revenue Commissioners to PAYE taxpayers who have overpaid tax; his views on this apparent anomaly; and if he will make a statement on the matter. [24578/96]
I am informed by the Revenue Commissioners that self-employed taxpayers are obliged to make a preliminary tax payment on or before I November each year. Where the amount of preliminary tax paid is less than a certain amount — which is calculated by reference to either the taxpayers eventual liability — for that year or by reference to the tax liability for preceding years — interest is charged at the rate of 1.25 per cent per month or part of a month on any balance of tax found to be due on finalisation of the taxpayers liability for the year. Where the preliminary tax payment is greater than the taxpayers ultimate liability, interest at the rate of 0.6 per cent per month is paid by the Revenue Commissioners on any resulting refund.
The PAYE system is designed to be self regulating by spreading payments evenly over the year as far as possible so that, as a general rule, significant underpayments or overpayments are minimised. Hence there is no legislation specifically imposing a charge to interest on underpaid PAYE by individual taxpayers or providing for its payment in cases where tax has been overpaid.
