Brendan Griffin (Kerry South, Fine Gael)
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Question 162: To ask the Minister for Finance if a person (details supplied) with a small farm, needs to keep accounts; and if he will make a statement on the matter. [18367/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that a person carrying on a business is required, under section 886 of the Taxes Consolidation Act 1997, to keep all records that are required to ensure that a full and detailed tax return can be made. The section also requires that the records be kept on a continuous and consistent basis so that they are not written-up from memory retrospectively or selectively. I am further informed by the Revenue Commissioners that on making an annual tax return a person is required to provide extracts from the business accounts for the accounting period which forms the basis year to which the tax return relates.

In the absence of such accounts a person would not be in a position to complete the return form in the required manner. In general, business accounts include a trading and capital account together with a balance sheet. However, in the case of a small trader, as for example in the circumstances outlined, an income and expenditure account would suffice, providing it contains the information required to be included on the tax return.

Although the accounts need not be submitted with the return, they must be retained (together with supporting documentation) for six years as they may be requested by Revenue for the purpose of an assurance check or an audit.