Revenue instruct Employers to take Local Property Tax from employees
Toady, 20 June 2014 Revenue issue notice on colelction of Local Property Tax (LPT) from employees pay
Important notice: Filing and payment of Local Property Tax (LPT) by Employers in respect of Employees
Revenue has collected in excess of €600m in respect of Local Property Tax (LPT) and arrears of Household Charge (HHC) since it became responsible for administering the tax in early 2013. Property owners who are in employment or in receipt of an occupational pension may opt to pay their LPT/HHC through deduction at source (DAS) from salary or pensions. In addition, where a property owner fails to pay their LPT/HHC, Revenue may instruct their employer or pension provider to deduct the payment at source from their salary or pension. The same form of instruction issues to the employer or pension provider whether it is a ‘voluntary’ or ‘mandatory’ instruction.
The legislation in regard to DAS for LPT/HHC is provided for in the Finance (Local Property Tax) Act 2012 (as amended) and employers/pension providers are obliged to collect and account for the tax on behalf of employees when instructed to do so by Revenue. The instruction is issued to employers/pension providers by way of an Employers’ Tax Credit certificate (P2C), as provided for under Section 65 of the Act and the employer/pension provider must implement the instruction through their payroll system and return the LPT through their P30 and P35 returns.
Where an employer/pension provider received such a P2C notification in respect of an employee/pension recipient for the 2013 LPT tax year but failed to account for the amount specified, then the employer/pension provider should immediately rectify the situation by filing amended P35 and P35L returns and paying any balance outstanding.Information on how to file amended returns.
Over the next few weeks, Revenue will write to employers who appear to have unpaid LPT liabilities on record for the 2013 tax year and will demand payment as provided for under Section 960E (2) of the Taxes Consolidation Act 1997. The demand will be followed up with debt recovery/enforcement action as necessary. Any such debt recovery/enforcement action may include interest, which will be calculated from the due date up to the actual date payment is received. Penalties may also be imposed for failure to deduct and pay over the LPT as instructed.
Where an employer/pension provider was instructed to deduct LPT from an employee/pension recipient by way of P2C for the 2013 tax year, but the employee/pension recipient had ‘ceased’ before the instruction could be activated, then the employer/pension provider should have filed a P45 notification in the normal manner. Where for any reason an employee/pension recipient did not receive payments subsequent to receipt of the P2C instruction (example long-term absentee in the case of employment), then the employer/pension provider should notify Revenue in this regard. The notification should be sent to LPT Branch, PO Box 1, Limerick or emailed to EmployersLPT@revenue.ie
For the 2014 tax year instructions are continuing to issue in relation to LPT for 2014 and arrears of HHC. Employers/pension providers who receive a P2C instruction to deduct and pay over LPT/HHC for any employee/pension recipient should implement the instruction from the next payment date in their payroll cycle. The liability should be deducted in equal amounts over the rest of the year. If for any reason this is not possible, the employer/pension provider should contact the Employer Helpline at 1890 254565 or at email address firstname.lastname@example.org outlining the specific circumstances involved.
In circumstances where an employer/pension provider does not deduct the amount of LPT (as instructed) from the employee and pay it over to Revenue, then the employer/pension provider becomes liable for the amount due. Non-operation of the instruction may result in interest charges, penalties, refusal of a tax clearance cert and increases the chances of a tax audit.