I believe the vast majority of people will want to be compliant with the Local Property Tax (LPT), as they are with other taxes legislated for by the Oireachtas. Revenue is making it as easy as possible for people to comply with their obligations to submit an LPT return and either make arrangements to pay their LPT charge or avail of a deferral of the charge if they are eligible. A wide range of payment options will be available to liable persons, which will allow them to pay their LPT liability in full or to pay the tax in equal instalments beginning in July 2013. For those liable persons who choose not to make an LPT Return, the Revenue Commissioners have a duty, in the interests of fairness and equity to those who are compliant, to take effective follow-up action to recover the tax from the non-compliant.
As part of the general issue of LPT Returns that began last week, liable persons are also receiving a Revenue Estimate of LPT. The Revenue Estimate is not based on a valuation of individual properties; nor, since LPT is a self-assessed tax, should it be regarded as an accurate calculation of the amount of LPT that a liable person should pay. The Revenue Estimate is an amount of LPT that will be pursued by Revenue, in accordance with the LPT legislation, if the liable person does not complete and submit their LPT Return.
I am advised by the Revenue Commissioners that their initial compliance focus will be on the completion of the register and they will decide on the precise details, phasing and timing of the compliance campaign depending on the profile of the non-compliant population. In the first instance, the Commissioners will pursue payment of the Revenue Estimate by mandatory deduction at source. In these cases the non-compliant liable person will be notified prior to any such mandatory deductions taking place and an instruction will issue from Revenue to the liable person’s employer, pension provider or to certain Government Departments to deduct the appropriate amount of LPT from the liable person’s employment income, occupational pension or from certain Government payments. These instructions will be the same irrespective of whether the deduction payment option has been voluntarily selected by the liable person, or mandatorily imposed by Revenue. If a liable person subsequently files the LPT Return and confirms the amount of LPT due based on her/his assessment of the value of the residential property,
Revenue will notify her/his employer, pension provider or Government Department, as the case may be, if the amount of LPT due for payment has changed.
As regards timing, the objective will be to spread the deductions evenly over as many pay periods as possible. In this context, it is anticipated that the compliance campaign will commence in the second half of June, and will focus initially on income from employment and occupational pensions with a view to beginning deductions from July pay dates. A second and later phase will focus on Government payments, and in this regard the Deputy should note that if a person’s sole income is a payment from the Department of Social Protection, her/his income will be below the thresholds to qualify for a deferral of the tax. The timing of deductions from payments from the Department of Agriculture, Food and the Marine will depend on the timing of the relevant payments.
Where deduction at source is not feasible, which will generally be in the case of self-assessed taxpayers, a liable person who submits their Income Tax or Corporation Tax Return but has not by then submitted their LPT Return or paid or entered into an arrangement to pay the tax will automatically incur a 10% surcharge on the Income Tax or Corporation Tax liability for the particular year of assessment or accounting period. This will be the case even where the Income Tax or Corporation Tax return is itself filed on time. Where the liable person subsequently submits the outstanding LPT Return, the surcharge will be capped at the amount of the LPT liability. The timing in the case of Corporation Tax will vary, but for income tax the relevant date is 31 October 2013 for paper filers, and such later date as the Commissioners may announce as the filing date for e-filers, usually within the following two weeks.
I am further advised that the normal compliance and debt recovery provisions apply to LPT as apply to the collection and recovery of other taxes and duties under the care and management of the Revenue Commissioners.
Finally, any unpaid LPT will attach to the property, and the liable person will not be able to sell or transfer the property without paying the LPT, interest and penalties due. The Revenue Commissioners are discussing the details of the processes with the Law Society, but it is envisaged that solicitors will be in a position to verify that LPT has been paid to enable them to properly complete conveyancing.
