“Reasonably Required” Means Already Known: High Court Clarifies that a Valid s.865 TCA Repayment Claim May Rely on Revenue-Held PAYE Data

Introduction

In McNamara [Deceased] v The Revenue Commissioners [2025] IEHC 507, the High Court (Kennedy J) allowed an appeal by way of case stated from a Tax Appeals Commission determination that had refused a PAYE taxpayer’s sizeable repayment of income tax on four-year time limit grounds under section 865 of the Taxes Consolidation Act 1997 (TCA). The pivotal question was whether a taxpayer’s amended return filed within time contained “all the information which the Revenue Commissioners may reasonably require” to amount to a “valid claim” for repayment, where the missing item (the precise PAYE tax deducted) was already in Revenue’s possession via the statutory PAYE system.

The appellant, a PAYE employee who performed most duties abroad in 2011 and was non-resident, had vastly overpaid Irish tax through payroll deductions. An amended Form 11 was filed online on 30 December 2015 (within time) to trigger a refund. However, due to a Revenue Online Service (ROS) design constraint, the actual PAYE tax deducted (€40,892.83) could not be entered in the “PAYE tax deducted/refunded” field because it exceeded the (correct) amount of Irish-taxable Schedule E income (€8,642). The agent instead entered €8,641.90 (ten cents lower than the Irish-taxable income figure), and—crucially—the “expression of doubt” note intended to explain the mismatch did not transmit on submission. A further communication on 22 December 2016 explicitly set out the correct PAYE figure and explained the ROS issue, but by then the four-year window had closed for 2011.

The Tax Appeals Commission held that the 2015 amended return did not contain all “reasonably required” information to be a valid claim and that Revenue was not obliged to cross-reference employer PAYE data. The High Court disagreed. It held that the “reasonably require” qualifier in s.865 means Revenue cannot insist on the taxpayer re-furnishing information which Revenue already has through the statutory PAYE regime. The Court therefore found that a valid repayment claim had been made within time and that the Commissioner erred in law.

Summary of the Judgment

The High Court allowed the appeal and answered both questions of law in the taxpayer’s favour:

• The Commissioner erred in concluding that the appellant had not provided all information “reasonably required” within the four-year period to establish entitlement to the repayment of €32,251.83 for 2011.
• The Commissioner erred in finding the claim outside the s.865(4) time limit. The amended 2015 return constituted a “valid claim” for s.865 purposes.

Central to the reasoning was the construction of “valid claim” under s.865(1)(b) and the qualifier “reasonably require.” The Court held that information already in Revenue’s possession through the compulsory PAYE system—especially the amount of tax actually deducted and remitted for the employee—was not “necessary” to be re-supplied by the taxpayer to make a valid claim. The Court further held that the near identity between the taxable income figure (€8,642) and the “PAYE paid” figure entered (€8,641.90) was a glaring anomaly which should have put Revenue on inquiry; a quick check of PAYE records would have resolved the discrepancy. While acknowledging shared fault (ROS constraints and the agent’s failure to effectively flag the issue within the form or by side communication on the filing date), the Court emphasized that none of this displaced the legal construction of s.865.

Analysis

Precedents and Authorities Cited

• Mara (Inspector of Taxes) v Hummingbird Ltd [1982] ILRM 421 and Mac Cárthaigh v Cablelink Ltd [2003] 4 IR 510 (with Blayney J’s summary in Ó Culacháin v McMullan Bros [1995] 2 IR 217): These establish the case-stated standard. Primary factual findings are undisturbed if supported by evidence, but inferences and legal conclusions are reviewable. The High Court accepted the Commissioner’s key primary findings (e.g., the “expression of doubt” did not transmit) but held the Commissioner misdirected himself on the law in treating the claim as invalid.
• Menolly Homes v Appeal Commissioners [2010] IEHC 49: Charleton J’s statement that there is “no equity in tax” and that obligations and remedies are strictly statutory. The Court embraced this orthodoxy but read the statute in context, focusing on the express “reasonably require” limitation in s.865.
• Kenny Lee v Revenue Commissioners [2021] IECA 18: Confirms the Tax Appeals Commission (and the Court on appeal) must apply the charging/time limit provisions to the facts. Here, the High Court applied s.865 as written, emphasizing the reasonableness qualifier.
• Perrigo Pharma International DAC v McNamara [2020] IEHC 552 and Heather Hill Management Company CLG v An Bord Pleanála [2022] IESC 43: These articulate contemporary Irish statutory interpretation principles: plain meaning must be discerned contextually, having regard to the subject matter and legislative objective. The High Court used these to conclude that the purpose and context of s.865—set within a statutory PAYE framework—militate against a rigid, stand-alone reading of “all information” that ignores Revenue’s own readily available PAYE data.
• Revenue Commissioners v Tobin [2024] IEHC 196: Applying Heather Hill methodology to a disclosure standard (“full and true” in s.955). The Court drew from Tobin the need for context and caution when displacing apparent meaning, reinforcing the analytical discipline applied here to “reasonably require.”
• Commissioners for HMRC v Raymond Tooth [2021] UKSC 17: Persuasive authority. The UK Supreme Court held that returns must be read contextually and declined to allow a revenue authority to shelter behind “computer-only” reading of online returns. The High Court relied on Raymond Tooth to reinforce that tax returns, though e-filed, must be interpreted by a “sentient, literate, human being,” and obvious anomalies can trigger sensible checks.
• Dolan v Nelligan [1967] IR 247 and Murphy v AG [1982] IR 241: Earlier Irish authorities concerning the State’s obligation to repay unlawfully levied tax and constitutional dimensions of restitution. While not determinative under the modern s.865 framework, they form part of the Irish backdrop emphasizing fairness and the repayment of overpayments.

Core Legal Reasoning

The judgment turns on the construction of s.865 TCA and, in particular, the statutory definition of a “valid claim” in s.865(1)(b):

• Under s.865(1)(b)(i), a statement or return is a “valid claim” if it contains “all the information which the Revenue Commissioners may reasonably require to enable them determine if and to what extent a repayment of tax is due.”
• Under s.865(1)(b)(ii), where such information is not contained in the return, the claim is treated as valid when that information has been furnished by the person.
• Under s.865(3) and (4), no repayment is due unless a “valid claim” is made within four years after the end of the chargeable period.

Kennedy J emphasized the Oireachtas’s choice of words—“may reasonably require.” The Court reasoned that Revenue cannot insist that a taxpayer re-supply information that is already within Revenue’s own knowledge and systems where that information arises from a compulsory statutory mechanism designed precisely to provide it. PAYE is both a collection system and an information system, requiring employers to provide Revenue with authoritative, employee-specific data on income and tax deducted. On the facts, Revenue already had:

• the employee’s PAYE deductions for 2011 (via employer submissions), and
• the remittance of those deductions (Revenue itself received the payments).

Consequently, while it may be convenient for Revenue to have the “tax paid” figure re-entered in a Form 11 field, it is not “reasonably required” from the taxpayer in order for Revenue to determine whether a repayment is due and to what extent, when that figure is already in Revenue’s possession from an authoritative statutory source.

The Court also stressed that the return must be read contextually. The practical near-identity of the taxable income figure (€8,642) and the PAYE-tax-deducted entry (€8,641.90) was a clear red flag. A literate reviewer should have perceived the implausibility (a near-100% PAYE deduction rate) and could have resolved it by consulting Revenue’s own PAYE records. This was not to impose a general duty to cross-check every return against third-party data, but to recognise that, in this scenario, the relevant information was within Revenue’s own systems and readily accessible. The hurdle in ROS (preventing entry of the correct figure) and the agent’s failure to effectively flag the issue on the day were acknowledged; but they did not alter the proper legal test under s.865.

The Court distinguished necessity from convenience: the statutory test is whether the information is “reasonably required,” not whether it would be administratively convenient for Revenue to have the taxpayer restate data that Revenue already holds. The Court rejected an interpretation that would treat the return as a hermetically sealed, stand-alone document, an approach inconsistent with both legislative context (PAYE) and interpretive principles (Heather Hill, Perrigo).

Finally, the Court noted that Revenue’s own guidance recognises that, for non-self-assessed PAYE taxpayers, repayments can be made based on information available to Revenue without a claim. That practice, while not governing self-assessed taxpayers, underscores Revenue’s access to—and use of—PAYE data in determining overpayments. It would be incongruous to ignore that data in the narrow context of deciding whether a self-assessed taxpayer’s amended return contained “all the information [Revenue] may reasonably require.”

Impact and Implications

This judgment meaningfully recalibrates the boundary between taxpayer obligations and Revenue’s use of its own statutory information assets when assessing whether a repayment claim is “valid” under s.865:

• Scope of “reasonably require” in s.865(1)(b): Information already in Revenue’s possession through the statutory PAYE system is not “reasonably required” to be re-furnished by the taxpayer as a condition of a valid claim. This narrows Revenue’s ability to treat omissions or inaccuracies in a return as fatal where the missing data is already held by Revenue and readily accessible.
• Contextual reading of returns (including anomalies): Returns, even if filed online, must be interpreted holistically. Obvious anomalies can and should be resolved by Revenue by consulting its own records. This pushes against a purely box-by-box or machine-only approach to return processing when that defeats substantive accuracy.
• PAYE as both collection and information infrastructure: The judgment emphasises the legal and practical significance of employer-furnished PAYE records in determining an employee’s liabilities and entitlements. It signals that Revenue should rely on the PAYE dataset where appropriate in processing self-assessed claims involving PAYE credits.
• Administrative and systems design: The Court acknowledged ROS caused the initial problem and noted Revenue has since remedied it. The decision will likely spur continued system design that allows correct data entry in atypical scenarios (e.g., cross-border employment) and encourages internal cross-references to prevent erroneous assessments where internal data already resolves discrepancies.
• No erosion of time limits, but a clearer path to validity: The four-year time bar in s.865(4) remains firm. The practical change is that, when a taxpayer files an in-time return that omits an item already known to Revenue through PAYE, the claim may nonetheless be valid within time, avoiding the need for subsequent supplementation that might otherwise fall outside the window.
• Potential ripple effect to other “reasonably require” or “full and true” standards: While the holding is anchored in s.865 and the PAYE context, the interpretive approach (contextual reading, use of internal Revenue-held statutory data, and the significance of “reasonably require”) may influence future disputes around analogous statutory thresholds (e.g., s.955).
• Equality and fairness considerations: The Court cautioned against interpretations that would arbitrarily differentiate between classes of PAYE taxpayers without justification. Expect more emphasis on consistent treatment where Revenue’s internal information base is the same.

Complex Concepts Simplified

• PAYE (Pay As You Earn): A statutory system where employers withhold income tax from employees’ wages and remit it to Revenue. Employers must also report detailed payroll information. Thus, Revenue already “knows” how much PAYE tax has been deducted for each employee and that those sums were received.
• Section 865 TCA 1997 (Repayment of tax): Entitles a person to a repayment of tax paid that was not due, but only if a “valid claim” is made within four years. A “valid claim” requires that all information which Revenue may “reasonably require” to determine if and to what extent a repayment is due be contained in the return (or be subsequently furnished).
• “Reasonably require”: This qualifier limits what Revenue may insist upon from the taxpayer. If Revenue already has the relevant data (e.g., PAYE deductions) via its statutory systems, it is not “necessary” for the taxpayer to re-supply it to create a valid claim.
• Case Stated appeal: The High Court reviews questions of law from the Tax Appeals Commission. Primary facts generally stand if supported by evidence; legal conclusions and inferences can be corrected.
• “Expression of doubt” field: An optional field in tax forms to flag uncertain positions or explain anomalies. Here, the agent tried to use it to note the ROS constraint, but it did not transmit.
• Contextual reading of returns: Returns are treated like any document; obvious anomalies should not be ignored on the basis that a computer, not a person, reads them. The UK Supreme Court’s Raymond Tooth is persuasive on this.
• Necessity vs convenience: The statutory test is whether Revenue “reasonably requires” the information to determine the refund—this is different from what might be convenient or preferred.

Practical Takeaways

• For self-assessed taxpayers with PAYE income, an amended return filed within four years can be a valid s.865 claim even if the “tax paid” figure is omitted or incorrect, provided Revenue already holds that figure in its PAYE systems.
• When an anomaly is unavoidable (e.g., software constraints), add a clear explanatory note at filing—through an appropriate field, cover letter, or MyEnquiries—and keep proof of transmission. Although the Court found the claim valid here, contemporaneous flagging can avoid disputes.
• Revenue should be prepared to consult internal PAYE data to resolve obvious anomalies, especially where that data is definitive and directly relevant to the claimed repayment.
• ROS forms should continue to accommodate atypical but legitimate data scenarios (such as cross-border employment resulting in PAYE exceeding Irish-taxable income).
• The four-year limit remains strict; the benefit of this case is in clarifying what makes an in-time filing a “valid claim,” not in extending the limitation period.

Conclusion

McNamara establishes a significant and practical clarification in Irish tax repayment jurisprudence: under s.865 TCA, “all the information [Revenue] may reasonably require” does not include information already held by Revenue via the statutory PAYE regime. A taxpayer’s failure to duplicate that data does not invalidate a repayment claim made within the four-year period.

The decision integrates contemporary Irish principles of statutory interpretation with the operational realities of PAYE. It rejects a formalistic, stand-alone reading of returns and embraces a contextual approach, aligned with persuasive authority in Raymond Tooth, that a literate human reader must consider evident anomalies in returns and may resolve them by consulting authoritative internal records. While the Court acknowledged shared responsibility—ROS’s design and the agent’s missed opportunity to flag the issue—it held that these facts could not defeat the proper legal reading of s.865.

Going forward, the judgment:

• anchors the analysis of “valid claim” firmly in the “reasonably require” qualifier,
• endorses Revenue’s use of its own PAYE records to determine repayments, and
• promotes consistency and fairness in processing claims by PAYE employees who are self-assessed.

The case is a measured but important recalibration: it does not loosen time limits, but it aligns legal form with informational substance, ensuring that repayment entitlements are not thwarted by the failure to restate what Revenue already knows.

Case Details

• Citation: McNamara [Deceased] v The Revenue Commissioners [2025] IEHC 507
• Court: High Court of Ireland
• Judge: Kennedy J
• Date: 20 October 2025
• Statute: Taxes Consolidation Act 1997, s.865; appeal by case stated under s.949AQ
• Outcome: Appeal allowed; both questions answered in favour of the appellant; amended return of 30 December 2015 was a “valid claim.”