Dáil Éireann Debate, Tuesday - 8 April 2014
87. Deputy Terence Flanagan asked the Minister for Finance if he will review the extreme penalties charged for late payment of the household charge and local property tax which is leading to hardship for senior citizens; and if he will make a statement on the matter. [16013/14]
View answerThe Deputy will be aware that prior to 1 July 2013, the Household Charge was administered by the Local Government Management Agency (LGMA). From 1 July 2013, in accordance with section 156 of the Finance (Local Property Tax) Act 2012 (as amended) any arrears of Household Charge became €200 per residential property, the charge was converted to Local Property Tax (LPT) and the Revenue Commissioners took over responsibility for collecting these arrears. Because the Household Charge is now regarded as LPT, the range of very flexible payment options that is available for LPT, as well as the opportunity to defer payment in certain instances, apply equally to Household Charge arrears.
I am informed by the Revenue Commissioners that on 18 February this year the Commissioners announced that property owners had until 31 March 2014 to bring their LPT affairs (including Household Charge) up to date and avoid interest and penalties. This deadline was widely publicised both on the Revenue website, in newspaper advertisements and through interviews with Revenue spokespersons on local and national media during the six week period between 18 February and 31 March. The Deputy will also be aware that, due to the volume of calls received on their helpline on 31 March, the Commissioners extended this deadline by two days to 2 April.
I am advised that as a result of their information campaign, many property owners have taken the necessary action to sort out their LPT affairs. To date, a compliance rate of 93% has been achieved for 2013 and the rate for 2014 currently stands at 88%. In relation to payment of Household Charge arrears, the Commissioners have confirmed that to date about €5.6m has been paid directly to Revenue in respect of about 28,500 properties. I am informed that Revenue is still handling significant numbers of contacts from property owners anxious to regularise their affairs.
The Revenue Commissioners have confirmed to me that no interest or penalties have been charged to date on Local Property Tax arrears, however, as they have consistently stated over the past number of weeks, they will begin to impose these charges where a property owner does not engage with them. In that regard, Section 149 of the 2012 Act provides for the charging of interest on late payment of LPT (including Household Charge) at an annual rate of 8%. I should add that this rate is the same rate of interest charged on overdue income tax.
I, therefore, strongly encourage property owners to make immediate arrangements to pay any outstanding LPT and Household Charge arrears by accessing their LPT record on-line using their Property ID, PIN and PPSN. Where assistance is required to file on-line, or where a person does not have their Property ID or PIN, they should call the LPT helpline on 1890 200 255.
While I appreciate the Deputy s comments about the hardship involved for certain sections of the community, as I explained earlier, the LPT legislation provides a wide range of payment options for property owners to avail of and to choose from based on the payment type that best suits their needs. These include phased payment options by way of direct debit from certain credit union or bank accounts, or by deduction at source from occupational pensions and certain Government payments, including Department of Social Protection payments. The property owner can also make regular weekly or monthly payments to one of the three payment service providers which are An Post, Payzone and Omnivend.
Also, specifically in cases where a person is having difficulty meeting their obligations, Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for a system of deferral arrangements for owner-occupiers where there is an inability to pay the tax and the person meets certain criteria based on income thresholds. For example, an older person, whose only source of income is a payment from the Department of Social Protection would qualify for full deferral of the LPT charge, including any arrears of the Household Charge. However, if a person has income in addition to any DSP payment, they will qualify for deferral if their gross annual income is less than €15,000 for a single person or €25,000 for a couple. They would qualify to defer 50% of their LPT charge where their gross annual income is less than €25,000 for a single person or €35,000 for a couple and the remaining 50% of the tax must be paid.
Further details of the deferral arrangements available are set out on the Revenue website at http://www.revenue.ie/en/tax/lpt/deferring-payment.html. The Commissioners also engaged extensively with Citizens Information Centres and the deferral principles are well understood by their staff. It is very important at this stage, as the Revenue Commissioners move into their compliance campaign, that anyone qualifying for deferral of the tax applies to the Revenue Commissioners as a matter of urgency. Again, this can be done very easily by going on-line or contacting the LPT helpline.
It is my firm view that LPT, in common with all other taxes and duties, must have a robust but reasonable set of sanctions open to the Revenue Commissioners to apply in appropriate cases. Given the very high levels of voluntary compliance to date for LPT, there is an onus on the Commissioners to pursue the non-compliant and to impose appropriate additional charges. The deferral options that I have legislated for are there to address hardship cases. In view of the foregoing, I have no plans to amend the legislation in relation to the charging of interest and penalties on late payments of LPT.
