Dáil Éireann Debate, Thursday - 12 June 2014
67. Deputy Michael McGrath asked the Minister for Finance if he will provide full details, including all relevant statistics, of the Revenue Commissioners' efforts to collect any unpaid household charge and local property tax liability; and if he will make a statement on the matter. [25108/14]
View answerI am advised by Revenue that it has collected over €291m to date in 2014 in respect of Local Property Tax (LPT) and Household Charge (HHC). This figure is approximately 8% ahead of target up to 31 May 2014.
In regard to HHC, Revenue has collected over €20m in respect of more than 122,000 properties since it assumed responsibility for securing the outstanding liabilities. Approximately €18m of this amount, in respect of almost 112,000 properties, has been collected since Revenue launched its compliance campaign earlier this year. Revenue has also largely dealt with 70,000 items of HHC related correspondence which was received since the compliance campaign started. On that basis, Revenue is in a position this week to move on to debt collection/enforcement action against those who have still not complied, as previously advised to property owners.
In regard to LPT compliance, the Deputy will be aware that Revenue has to date achieved a compliance rate of 94% in respect of 2013 and a 91% rate in respect of 2014 and will, in tandem with HHC compliance action, move on to debt collection/enforcement action against LPT non-compliers over the coming weeks.
The actions to be deployed against HHC/LPT non-compliers will include deduction from employment income for PAYE workers or from occupational pensions or certain Government payments where appropriate. The actions to be deployed against self-assessed taxpayers, some of which have already been used, will include withholding of Tax Clearance Certification, surcharges on Income Tax, Corporation Tax and Capital Gains Tax returns and withholding/offset of any other tax refunds. The actions will also include referral to a Sheriff or Solicitor or the use of Attachment where it is appropriate to do so. Interest on late payment at a rate of 0.0219% per day, may also be included in any enforcement action, which will be calculated from the relevant due date up to the date of payment. The Deputy will agree that these actions have been well flagged by Revenue.
Revenue has advised me that approximately 50,000 letters will issue this week to property owners who are taxed under the PAYE system informing them that notifications are issuing to their employers instructing them (the employers) to deduct the €200 HHC liability from salary over the remaining pay periods in 2014. These amounts will be in addition to any deductions that may already be in place in respect of LPT. Following the issue of the letters to the property owners, Revenue will then issue the instruction to their employer or occupational pension provider to deduct the amount due over the rest of the year. Revenue has advised me that the production schedule for the employer instruction takes a seven day turnaround from the issue of the letter to the property owner and if the property owner pays (or makes payment arrangements) or can show Revenue that they are not liable within 5 days of the date of the letter, Revenue will be able to stop the issue of the instruction. If the owner pays (or makes payment arrangements) or can show Revenue that they are not liable after the instruction is issued, Revenue will cancel the instruction immediately, depending on the employer's payroll cycle. If deductions have started credit will be given for any payment taken. These arrangements are set out in the letters to property owners.
A further 20,000 letters will issue towards the end of this week to property owners who have not paid the HHC and whose only source of income is from the Department of Social Protection. The letters will advise the owners that they are likely to be eligible for a deferral of the €200 charge which will be granted automatically unless they contact Revenue to pay the amount due (or make payment arrangements) or advise why they may not be liable. The deferral will be liable to the reduced interest charge of 4% per annum (compared to c. 8% in non compliant cases).
Further tranches of letters will issue to non-compliant property owners taxed through the PAYE system in respect of combinations of HHC, 2013 LPT and 2014 LPT liabilities (as relevant) over the remaining weeks of June and the first week of July. These letters will again confirm that notices are issuing to employers/pension providers to start deductions at source as soon as possible within the payment cycle.
Revenue has also advised me that payment demand letters in respect of combinations of outstanding HHC, 2013 LPT and 2014 LPT liabilities will issue to all property owners taxed under self-assessment system during June and early July. The demand letters will confirm that the outstanding liabilities will be referred to Sheriffs or Solicitors for collection or will be the subject of Attachment orders unless payment is immediately received. It is important to realise that once a debt is referred to a Sheriff or Solicitor the property owner must deal with that body rather than Revenue in regard to issues such as phased payments, etc. In addition the property owner will be liable to pay the Sheriff's costs which will increase the overall liability by something in the region of 10% of the amount due.
In total Revenue anticipates that in excess of 200,000 compliance letters will have issued by early July, though this number will most likely reduce as property owners decide to pay their outstanding liabilities to avoid the additional expense and embarrassment that comes with Revenue debt collection/enforcement activity.
Finally, I want to commend Revenue for the job it has done to date in achieving such high collection and compliance rates in respect of both LPT and the arrears of HHC. This is particularly the case in regard to HHC, where the liability doubled from €100 to €200 if not paid by 1 July 2013, which obviously increased the collection/compliance challenge. I have no doubt that the increased liability has also placed a strain on property owners that could have been avoided if the original charge had been paid on time. I am concerned that this unnecessary increased liability and stress of dealing with Revenue arose, in some instances, on foot of poor advice to citizens by some commentators. While I fully support political debate in the design and development of our laws, I would urge all those advising citizens to bear in mind that the consequences, for example in the case of the Household Charge, is an increased liability. I strongly recommend anyone who receives one of these letters from Revenue to act now and pay or make arrangements to pay any outstanding liability by following the instructions included on the letter.
