Section 156 of the Finance (Local Property Tax) Act 2012 (as amended) provides that where the €100 Household Charge for 2012 had not been paid by 1 July 2013 the arrears amount is increased to €200 and is treated as Local Property Tax (LPT). Section 156 also made Revenue responsible for collecting the arrears.
The Deputy will be aware that by 1 July 2013 those who had not paid were already liable for €145 including accrued interest. Residential property owners were given notice by the Local Government Management Agency of the increase in unpaid HHC between 2012 and 2013. The Government's decision to refer the matter to Revenue, and the increase to €200 was debated and legislated for in this House. Property owners could have avoided paying the €200 had they paid the original €100 when it was due, or had paid the charge plus accrued interest any time prior to 1 July 2013. Furthermore, the Deputy will be aware that Revenue offered an opportunity which was well publicised to pay the €200 charge without further interest.
As I previously informed the House in my reply to Questions 168 and 169 on 6 May, the Revenue Commissioners undertook a comprehensive data matching exercise between the Local Property Tax Register and the Household Charge Register and identified a database of some 400,000 properties for which the Household Charge (HHC) was outstanding. The Commissioners have confirmed that work on verifying this database of non-compliant HHC property owners is continuing.
The House was also informed that it is accepted that the database may not be 100% accurate for a number of reasons, including:
- The LGMA Register captured the name of the person who paid the HHC rather than the owner of the property, therefore, for example, where a son or daughter paid the HHC on behalf of a parent and particularly where the address of the property was a 'non-unique' rural address, Revenue may not have been able to match the HHC payment to the right property;
- The legislative basis for both the HHC and LPT are different. Some properties that are liable for LPT were exempt from the HHC and, unlike LPT, property owners were not actually required to make a claim for exemption from HHC. For that reason, Revenue could not identify every property that was exempt from HHC through the cross-referencing process;
- There are some examples where the LGMA register did not fully record situations where the HHC was paid to a Local Authority directly. In all its communications with property owners during the current compliance campaign, the Revenue Commissioners have highlighted that these inconsistencies exist and have outlined the action that owners need to take if the HHC is not due.The Commissioners have also confirmed that to date they have written to some 227,000 property owners who, according to their records, had not paid the €200 arrears in respect of about 273,800 properties. The Commissioners are continuing to examine the remaining cases on their database of HHC arrears and further letters will issue in due course. The published forecasted yield for LPT in 2014 of €550m took full account of the work to be done by the Revenue Commissioners in relation to HHC. This figure includes estimates for LPT payments received in 2014, which are likely in the normal course to include current tax, arrears and prepayments, and HHC arrears collected this year.
The Commissioners advise that it is not possible at this stage to confirm how much they will collect in 2014 in relation to HHC arrears or if the forecast of €550m will be achieved. This will depend on the outcome of their Household Charge compliance campaign, bearing in mind the database issues set out above. However, while the HHC receipts will be recorded as LPT in the Revenue data, the amount of HHC paid will be identifiable, and will be capable of being reported on.
I am also informed that, to date, about €2m was collected in 2013, €13.8m has already been collected in 2014, of which €8.2m was paid since Revenue's compliance campaign began on 17 April 2014. The Commissioners continue to receive approximately 3,500 to 4,000 payments of HHC arrears every day.
I am further advised by Revenue that they will shortly begin to take appropriate enforcement action against any property owner that they have written to in connection with HHC arrears and the property owner has not responded. Such enforcement action may include deduction at source from salaries, occupational pension and certain Government payments as well as sheriff or solicitor action. I strongly encourage any property owner, therefore, who has not dealt with their arrears of HHC to do so as a matter of urgency.
As regards allocation of LPT, the legislation provides that, in each financial year commencing with 2014, the Minister shall pay from the Central Fund or the growing produce thereof into the Local Government Fund (LGF) an amount equivalent to the LPT, including any interest paid thereon, paid into the Central Fund during that year. The allocation of funding from the Local Government Fund is a matter for my colleague the Minister for the Environment, Community and Local Government.