Monday, September 02 10:35:40
The Revenue Commissioners are stopping tax refunds due to people who have failed to pay their property tax.
Over E175 million has been taken in by Revenue already and 90pc of households on the estimated register have filed their Local Property Tax (LPT) return but Revenue's pursuit of non compliers shows no sign of letting up.
This is according to Taxback.com who have reported that tax refunds are now being held up - due to non-payment of Local Property Tax liabilities.
Christine Keily, Tax Expert with The Taxback Group said that, since August 1st, she has seen a new type of communication from Revenue.
"We have received several advice letters from Revenue to taxpayers informing them of the amount of income tax or PAYE refund that they are due - and then advising them that they won't see a penny of it until they complete their LPT return."
Ms Keily added that these letters further demonstrate the lengths that Revenue will go to to ensure compliance - even with current a rate of over 90pc.
The tax experts say that if Revenue had simply deducted the LPT owed and paid the balance it would be one thing - but here they have withheld far greater amounts.
"Over the last few months we have seen a surge in the number of people contacting us in respect of potential Income tax and PAYE refunds. We believe that this is a result of the introduction of the LPT - as PAYE workers filed what was in many cases their first return, they engaged us to examine their affairs to see if they may be in line for a rebate to help fund this liability," added Ms Keily.
Taxback.com say that most of the people who contact them are in fact due a refund - after all, as reported in the Irish Independent recently (June 25th), only 5pc of taxpayers actually claimed a tax refund for money spent on health expenses in 2011 - so being proactive pays.
"However, now what we're seeing is taxpayers who have engaged with the Revenue and are due money back - often for amounts far in excess of any LPT which may be due - who have not yet filed their LPT return. And, in tandem with deductions from payslips and pensions, Revenue have found yet another way to ensure compliance - withholding their large tax refunds until a return is filed".
"In a typical case, a client of ours is due a refund of E3,437.89 - but Revenue will not pay due to "outstanding returns". We've seen dozens of these letters since 01 August and expect to see quite a few more."
"This also has implications for future taxes and charges (such as water charges) - will they be administered by the Revenue rather than by a local council, given how well this one went? Will Revenue have power to withhold refunds for non-compliers of other charges, regardless of who administers it?"
Taxback.com say the message from Revenue is clear - non-compliance is not an option.