Wednesday, 26 March 2014

Questions (47, 49)

Pearse Doherty


47. Deputy Pearse Doherty asked the Minister for Finance if the legislation on the household charge/local property tax is being challenged in the courts as to the legality or constitutionality of same; and if anybody taking the case is treated any differently for the purpose of LPT during the case. [14281/14]

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Billy Kelleher


49. Deputy Billy Kelleher asked the Minister for Finance if the Revenue Commissioners are entitled to garnish the income of a person or persons to pay the household charge and local property tax who is either appealing a Revenue debt or legally challenging the HC-LPT; and if he will make a statement on the matter. [14287/14]

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Written answers (Question to Finance)

I propose to take Questions Nos. 47 and 49 together.

In my reply to Question number 92 on 26 June 2013, I informed the House that a High Court challenge to the Local Property Tax (LPT) had been lodged. The House was also informed that the Chief State Solicitor was the solicitor on record acting for all State defendants and that the case was being vigorously defended by the Chief State Solicitor. I am advised that the High Court, on the application of the State defendants, made an Order in July 2013 dismissing the Plaintiff s claim on the grounds that it was frivolous and vexatious and disclosed no cause of action against the Defendants. This decision is under appeal to the Supreme Court.

I am also advised that another person is challenging the constitutionality of the Local Property Tax. This challenge is at an early stage and has not yet been set down for hearing in the High Court.

I am informed by the Revenue Commissioners that the LPT obligations of a liable person are not impacted by whether the person is in the process of challenging the legality or the constitutionality of LPT in the courts. Accordingly, the person is still obliged to file an LPT Return and make arrangements to pay the tax due, including any household charge arrears. Where liable persons file their returns and pay their LPT liability, including household charge arrears, on or before 31 March 2014, they will not incur interest or penalties. If by that date a person has not met his or her obligations, any outstanding LPT liabilities, including household charge arrears will be pursued, where necessary, using the range of collection/enforcement powers at Revenue s disposal which include, mandatory deduction at source from salary, various occupational pensions or from certain Government payments.

With regard to Question No. 49, I assume that the Deputy is referring to payment of LPT or the household charge when talking about a person appealing a revenue debt . I am advised by the Revenue Commissioners that as LPT is a self-assessed tax, it is a matter for the liable person to determine the amount of LPT due based on his or her valuation of the residential property, and to make arrangements to file their LPT Return and pay the tax on the basis of their self-assessment.

In common with other self-assessed taxes, the LPT Return as filed by the taxpayer is generally accepted by Revenue in the first instance.  If, subsequently, Revenue is dissatisfied with any of the details in the LPT Return such that the LPT liability of the property owner has been understated, Revenue may raise a formal notice of assessment to address any of the issues in question.  In these circumstances, provided the tax declared by the property owner in their LPT return has been paid in full, the LPT legislation allows a right of appeal by the owner to the Appeal Commissioners.  Revenue will suspend all enforcement action against any disputed amount, including mandatory deduction at source from wages and other income sources, until the appeal has been determined. Once the appeal is determined, if the case is found in Revenue s favour, the property owner will be liable to pay the additional tax due plus any interest that may have accrued.