Written Answers Nos. 75-85
75. Deputy Lucinda Creighton asked the Minister for Finance if the Revenue Commissioners will confirm the position concerning liability for local property tax in respect of a person (details supplied) in Dublin 4; and if he will make a statement on the matter. [47546/13]
View answerI am advised by Revenue that Section 11 of the Finance (Local Property Tax) Act 2012 (as amended) provides that lessees who hold long-term leases of residential property spanning twenty years or more, are liable to pay Local Property Tax (LPT) in respect of that property. In the specific case mentioned by the Deputy, I am advised that the person concerned is not considered to be the liable person for LPT purposes because, although he is the owner of the property, he has let it for a period of more than twenty years, and therefore the lessee is the liable person.
I am advised that Revenue amended the Property Register to reflect the lessee as the liable person. However, the difficulties experienced by the person arose because, due to an operational oversight, Revenue failed to inform the person that he was not liable to pay any LPT and as a consequence he paid the LPT in respect of the property.
I understand that Revenue has issued a response to the person in question, advising him that he is not liable for LPT and that a full refund of the LPT paid will issue to him within five working days.
Finally, Revenue apologises for the communications oversight and assures the Deputy that the vast majority of cases requiring amendments of this nature are immediately notified to the relevant people.
76. Deputy Michael McCarthy asked the Minister for Finance if his attention has been drawn to concerns relating to the possibility that the date of the pay and file income tax return deadline will be brought forward; the effect of such a change on cash flows for income tax payers and small and medium-sized businesses; the challenges for the professionals who complete and file tax returns on their behalf, for seasonal operations, particularly agricultural and tourist related operators; his views on the impact of this proposal on the current excellent level of compliance and the need to ensure that taxpayers, business groups, tax advisers and accountants are consulted on any proposed changes. [47559/13]
View answer87. Deputy Michael Healy-Rae asked the Minister for Finance his views on whether the proposed June option would be unworkable for taxpayers and for the profession, that is, for all practices whether small, medium or large; and if he will make a statement on the matter. [47627/13]
View answer89. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47634/13]
View answer90. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47635/13]
View answer91. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47636/13]
View answer92. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47637/13]
View answer93. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47638/13]
View answer94. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47639/13]
View answer95. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47640/13]
View answer96. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding the pay and file consultation period; and if he will make a statement on the matter. [47641/13]
View answerI propose to take Questions Nos. 76, 87 and 89 to 96, inclusive, together.
Under the regulations known as the “Two-Pack” which were formally adopted on 30th May 2013, a common budgetary timeline is being introduced for all Euro Area member states. Specifically:
- the draft budget for central government and the main parameters of the draft budgets for all the other sub-sectors of the general government must be published by the 15th of October each year;
- draft budgetary plans in a common format must be submitted by all Euro area Member States not in a programme of assistance; and
- the budget for the central government must be adopted or fixed upon and published by the 31st of December each year.
In light of these requirements, the Government decided to bring Budget Day forward from the first week in December to on or before the 15th of October from now on. Accordingly, I presented Budget 2014 on Tuesday last, 15th October. The Government also decided that the Finance Bill should complete its passage through the Oireachtas by the 31st of December each year. One of the most critical elements of the Budget process is the accuracy of systems for forecasting potential revenue yield in the year in question prior to the Budget actually taking place.
In the context of a December Budget Day, the availability prior to the Budget of information on cumulative tax yields to the end of November gave a high degree of certainty to the estimation of potential outturn for the year. For example, cumulative tax yield to the end of November 2012 was €33.8bn, which represented 92% of the full year outturn of €36.6bn. On the other hand, cumulative yield to end September, at €26.1bn, represented only 71.3% of the eventual outturn.
The scope for unanticipated events which would lead to either a higher or lower than projected outturn is considerably increased in the context of an October Budget. In addition the ability to project future yield is compromised. Consequently, measures which would result in improvements in the availability of information or increases in the proportion of total yield already available prior to the Budget have to be considered. The main areas where scope exists to introduce such improvements relate to the income tax Pay & File arrangements and on 11th October I initiated a consultation process on a revision of the existing arrangements.
I am aware of the concerns that have been raised and will consider the results of this consultation process, which closes on Friday next, 8th November, when drafting, as a Committee Stage amendment to the forthcoming Finance Bill, the necessary measures. I would reiterate that changes to the Pay and File regime are necessary as a result of the move to an earlier Budget Day, following the adoption of the Two-Pack and will provide increased certainty around the annual tax take. I would encourage all those who hold views on the proposed changes to engage with my Department via the consultation process. Full details are available on our tax policy website, www.taxpolicy.gov.ie.
77. Deputy Jerry Buttimer asked the Minister for Finance the reason a person (details supplied) in County Cork had local property tax deducted from their wages when they were exempt from LPT; the measures being put in place to rectify this error; and if he will make a statement on the matter. [47573/13]
View answerI am advised by Revenue that, in the case to which the Deputy refers, the deduction from wages was not in respect of the person’s primary residence which is exempt from Local Property Tax (LPT). The person in question was linked to a second property on the basis of records imported by Revenue from another Government agency database during the development of the Property Register. It is now evident that the person was registered with this agency to pay certain charges in relation to the second property but was not in fact the owner. It has since been confirmed that the property belongs to the person's parents and was duplicated on the Property Register.
I am further advised that the LPT Return which issued in March 2013 indicated to the person that he was a multiple property owner. Revenue received no contact from the person disputing the accuracy of his records and a compliance letter subsequently issued on 29 July 2013 in respect of the second property. The letter clearly requested that if he was not the liable owner that he immediately notify Revenue. The letter also advised that “deduction at source” would commence in the absence of a response. Revenue received no response from the person until 20 September 2013 when he telephoned to confirm that he did not own the property and that his parents were the liable persons. Unfortunately an instruction to deduct LPT from his salary had already issued to his employer.
On foot of the person's telephone contact, Revenue amended the Property Register and issued a revised instruction to his employer to cease deductions. The employer subsequently confirmed that deductions had ceased from 1 October. A refund of €50.50 is due to the person and I am assured that it will issue to him in the coming days.
Finally, Revenue has acknowledged that the linkage of the second property to the person in question during the development of the Property Register was an error. However Revenue did communicate strongly during the initial stages of LPT that errors in the compilation of the Property Register were inevitable given the scale of the task. Revenue also clearly requested anybody who received incorrect information in regard to their properties to contact the LPT Helpline immediately to avoid unnecessary compliance interventions. Unfortunately in this instance the person delayed making contact and as a consequence compliance activity commenced.
78. Deputy Jerry Buttimer asked the Minister for Finance the procedures employed by the Revenue Commissioners for repaying persons who have had the incorrect amount of local property tax directly deducted from their income; when such repayments will be made; if the required reimbursement will take the form of an amended personal tax credit or if it will be a direct repayment; and if he will make a statement on the matter. [47606/13]
View answerI am advised by Revenue that Local Property Tax (LPT) refunds are not reimbursed in the form of amended income tax credits. Revenue has confirmed to me that LPT refunds are either made directly to the property owner or set against other outstanding tax liabilities, including LPT, if appropriate. Revenue has also confirmed that in the case of overpayments arising from the ‘deduction at source’ payment option, liable persons should not request their employers or pension providers to make LPT refunds directly to them but should instead submit claims directly to Revenue.
By way of general comment, Section 26 of the 2012 Finance (Local Property Tax) Act (as amended) provides for a refund of LPT where a person has, in respect of a liability date, paid more than what was correctly due in error. A refund may be issued where a claim for repayment is submitted to Revenue within four years after the end of the year to which the claim relates.
In order to receive a refund a person must submit a claim in writing to Revenue. The basis for the claim should be explained in the submission and the relevant supporting documentation should be included. The supporting documentation must provide all of the information that Revenue may reasonably require to enable it determine if and to what extent a refund of LPT exists. All LPT refund claims should either be emailed to LPT@revenue.ie or posted to PO Box 1, Ennis, Co. Clare. The Act also provides that any person who is unhappy with a determination by Revenue in regard to a refund, may appeal that decision to the appeal Commissioners.
79. Deputy Michael McGrath asked the Minister for Finance the number of taxpayers that will be impacted in 2014 by restriction on tax relief on contributions to large pension pots outlined in budget 2014; and if he will make a statement on the matter. [47611/13]
View answer82. Deputy Michael McGrath asked the Minister for Finance the way he will ensure that the restriction on tax relief on contributions to large pension pots will apply equally to workers in the public and private sector; and if he will make a statement on the matter. [47614/13]
View answerI propose to take Questions Nos. 79 and 82 together.
It is difficult to be definitive about the number of individuals that may be affected by the changes to the Standard Fund Threshold (SFT) regime. Among other reasons, this is because the changes are likely to have both direct impacts and indirect behavioural impacts. The direct impacts will be on individuals whose pension savings or entitlements will be in excess of the reduced SFT on 1 January 2014 (and who may seek a Personal Fund Threshold (PFT)) and those whose pension savings or entitlements may be below the threshold on that date but, with future contributions or accruals, may exceed the threshold in time. For both of these groups where the SFT or PFT is exceeded at the point of retirement, chargeable excess tax will arise. However, the changes are also likely to mean that individuals (generally in the private sector) who may otherwise be affected by the amendments to the SFT, and who have the flexibility to do so, may change behaviour and opt out of additional pension saving or pension accrual, in circumstances where they can obtain compensatory payments from their employer, in order to avoid breaching the SFT or their PFT. Overall, the changes could potentially impact, both directly and indirectly, on up to 10,000 individuals in the short to medium term.
The changes to the SFT regime apply, as appropriate, to both defined benefit (DB) and defined contribution (DC) pension arrangements in both the private and public sectors. As regards DB pension arrangements, it is irrelevant whether an individual is a higher paid civil servant, a Minister or a highly paid member of a private sector DB scheme, the same SFT rules apply to all such arrangements.
80. Deputy Michael McGrath asked the Minister for Finance the provision that will be made for persons wishing to pay the local property tax by means of deduction from their current account for customers of the two banks who recently indicated their intention to cease offering retail banking services; and if he will make a statement on the matter. [47612/13]
View answerI am advised by Revenue that primary responsibility for providing valid bank account details in regard to any tax payment, including Local Property Tax (LPT), rests with the taxpayer. However, notwithstanding the above, Revenue has confirmed to me that when the banks in question confirm the timing of the service withdrawal, it will review all remaining debit instructions at that point, including LPT. Once the affected cases are identified, Revenue will endeavour to make direct contact with the relevant people to request alternative bank account details or to advise on alternative payment options.
81. Deputy Michael McGrath asked the Minister for Finance if he will provide a breakdown of the tax yield from his plan to restrict tax relief on private medical insurance policies by income band; and if he will make a statement on the matter. [47613/13]
View answerAn upper ceiling on the amount of medical insurance premiums that will qualify for tax relief, of €1,000 per adult and €500 per child was introduced in the Budget. The yield from this measure is estimated at €94 million in 2014 and €127 million in a full year. The position is that income tax relief is generally provided on contributions to private health insurance by way of the Tax Relief at Source system (TRS) at 20%, regardless of the whether the individual has an income tax liability or not. Therefore, information on the income of insured individuals is not necessary for the administration of the granting of tax relief at source. I am advised by the Revenue Commissioners that a breakdown of the impact of the Budget measure by range of income could not be compiled without requiring the health insurers to provide income-based information in their annual returns, followed by carrying out a significant development of the Revenue Commissioners’ TRS computer system.
83. Deputy Michael McGrath asked the Minister for Finance the number of taxpayers who will be affected by standard rating of pension tax relief; and if he will make a statement on the matter. [47615/13]
View answer84. Deputy Michael McGrath asked the Minister for Finance the tax yield that would be achieved by standard rating pension tax relief by income band; and if he will make a statement on the matter. [47616/13]
View answerI propose to take Questions Nos. 83 and 84 together.
A breakdown of the cost of tax relief on employee contributions to occupational pension schemes is not available by either income tax rate or by reference to income levels, as tax returns by employers to the Revenue Commissioners of employee contributions to such schemes are aggregated at employer level. There is, therefore, no statistical basis for providing definitive figures. However, by making certain assumptions about the available information, it is estimated that the full-year yield to the Exchequer from confining tax relief to the standard rate of 20% in respect of pension contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts and confining tax relief for the Public Service pension related deduction to the standard rate of 20% would be in the region of €480 million. This estimate includes €90 million in respect of the Public Service pension related deduction.
This estimate does not allow for possible behavioural changes that could arise from a change in the rate of relief. I should note that, as indicated in my Budget 2014 speech, contributions to pension savings will continue to attract income tax relief at the marginal rate.
In terms of the 2010 income tax year, the latest year for which the necessary figures are available, it is estimated that about 760,000 claimants avail of income tax relief on contributions to occupational pension schemes, retirement annuity contracts and personal retirement savings accounts. Due to the lack of distributional data by either tax rate or by income levels as mentioned earlier it is not possible to provide reliable details of the impact of standard rating by reference to the numbers affected or by reference to income bands.
85. Deputy Clare Daly asked the Minister for Finance the reason he has not made the legislative changes requested by the Office of the Director of Corporate Enforcement relating to the negative impact on its ability to tackle white collar crime as a result of the insertion of section 851A of the Taxes Consolidation Act into section 77 of the Finance Act 2011, which has restricted the ability of the ODCE to obtain, and where obtained, use certain information from the Revenue Commissioners. [47618/13]
View answerMy colleague the Minister for Jobs, Enterprise and Innovation received Government approval on Tuesday 5 November to publish the Companies (Miscellaneous Provisions) Bill 2013. This Bill contains a proposed amendment to the Company Law Enforcement Act 2001 which is the legislation governing the ODCE. The relevant amendment addresses the sharing of information with the ODCE by the Revenue Commissioners and other bodies and is intended to resolve the difficulties encountered by the ODCE that arose as a result of the insertion of section 851A into the Finance Act 2011.
