Revenue gets tough with clampdown on property tax dodgers
Warning: 'Don't think you won't hear from us, because you will'
Published 10/09/2016 | 02:30
Homeowners who refuse to pay the local property tax (LPT) are being taken to court and having goods seized in a Revenue clampdown.
Despite a 96pc compliance rate, Collector General Michael Gladney said action was being taken because some homeowners refused to pay.
Some 80,000 people are subject to mandatory deduction, where the tax is taken directly from salary or pension due to their refusal to engage with the taxman. This is an increase of 23,000 over last year.
Mr Gladney also said legal proceedings had ramped up in 2016, with almost 50 court summonses issued and another 500 cases sent to sheriffs. Around 150 of these have gone to enforcement, resulting in goods being seized.
Mr Gladney warned: "It's (LPT) really easy to pay and really hard to avoid. If somebody has problems with LPT or another tax, don't let the issue fester. Don't think you won't hear from us, because you will. It's better to talk to us."
The LPT was introduced in 2013 and is based on the market value of the home. The deeply unpopular tax has been sharply criticised because it penalises people living in cities, where property prices are generally higher.
Homes are due to be revalued in November 2019, which could result in hikes of as much as 150pc for many families. Almost 1.9 million households are liable, but a cohort of around 70,000 refuse to pay.
In an interview with the Irish Independent, the head of Revenue's collection arm said the LPT tax take was 7pc ahead of target this year. "Because LPT has been so stable in previous years, we took a decision that we wouldn't run our compliance programme until April this year. It is normally two months earlier," Mr Gladney said.
"As of today, we're north of 96pc. I'm not one bit worried about compliance. As of the end of August, we're 7pc ahead of projections which is €20m plus. That to me is a real plus."
The Revenue Commissioners use a number of methods to track non-payers, including Google maps. Using satellite images of streets and townlands, properties where the tax has been paid are highlighted, allowing officials to target those where no payment has been made.
It also allows them assess if the correct rate of tax is paid. If a property owner is paying a lower amount than neighbouring homes, Revenue will make contact to ask why a lower valuation is being used. This year, 10,200 owners have 'self-corrected' or revalued their properties which incurred a higher LPT.
But it also uses a sophisticated IT system which analyses taxpayer records for compliance with income tax, VAT and the LPT, among other taxes. The system automatically flags risk, allowing Revenue to target individuals.
"We look at LPT, VAT and income tax. From that we can break down into county order, general tax districts or sheriff bailiwicks. I have people constantly looking at trends in estates and counties, looking for outliers," he said.
"If our system is showing us that a county seems to be a couple of percentage points down (in compliance), we can look at that county and then take it down to estates or towns or areas. This is very sophisticated. Our analytics are particularly strong."
But he said for the most part, people weren't "trying to pull a fast one". In most cases, LPT wasn't paid due to an oversight, such as people changing their bank account and forgetting to make a payment.
"It may not be the most popular tax, but the Irish public are generally very compliant," Mr Gladney said. He also said about 20,000 tax clearance certificates had not been issued this year due to arrears.
Revenue made repeated efforts to contact errant taxpayers, and most difficulties could be "sorted by conversation", but in some cases it was forced to take more drastic action.
"We may have to raise an assessment. The first thing we do is deduct at source, then it's the sheriff, and then we might go to court. It's like any negotiation, there comes a point when it's make or break. We have fine-tuned it. If somebody didn't pay in 2013 and 2014 and we wrote to them, by 2015 we had rolled it into one bill which was a game changer because it included interest at 8pc and surcharges."
Mr Gladney said it attempted to "work" with taxpayers to get bills paid. In 2015, it had some 9,000 phased payments arrangements in place, valued at €100m. "If people have a problem, don't leave it fester. We'll always come to an arrangement," he added.