The Revenue Commissioners has just begun to issue tax assessments to people who filed prompt tax returns for 1999/ 2000 as much as four months ago. Under normal circumstances a tax assessment would be posted out within three weeks of the tax inspector receiving the tax return. A Revenue Commissioners spokeswoman said there was some delays while "priority work" was cleared. It is understood that the delays were linked to a software upgrading problem. She said the department was now working to clear the arrears and all delayed tax assessments should be issued in the next few weeks.

If a case is straightforward, tax refunds will follow soon after the tax assessments. The delay has mainly affected self-assessed self-employed people but PAYE workers with additional non-PAYE income, for instance, those who invested in films, BES schemes or holiday homes, have also had to wait.

When a tax bill is not paid on time, the tax inspector imposes a penalty of 1 per cent per month on the amount due. In the case of the late payment of the tax refunds for the tax years 1998/ 1999 and 1999/2000, the Revenue Commissioners will only be paying interest to self-employed individuals, but not to the PAYE workers with additional income who made overpayments and also had to wait for their money.

The administrative difficulties being experienced by the Revenue Commissioners raise questions about the problems which may arise when the changeover to the calendar tax year takes place in 2002, just as the euro is being introduced.

Tax practitioners currently have 10 months to process and submit tax returns.

However, at the moment, eight months after the previous set of tax returns for 1998/1999 were filed, they have not been fully processed by the Revenue and refunds are still outstanding.

The Institute of Taxation, which sits on a Tax Administration Liaison Committee with the Revenue Commissioners, had no did have a comment to make on the issue.