State in dark on tax take from its rent payments
Published 30/04/2010 | 05:00
THE State paid rent to almost 120,000 landlords last year without knowing if they were paying tax on the income.
According to new figures, four-out-of-five landlords who rented out properties to 93,000 tenants under the state's Rent Supplement Scheme last year have still not passed on their personal public service (PPS) numbers to the Department of Social Protection.
This means that it is not possible for the Revenue Commissioners to easily check if the landlords are paying tax on the rental income they receive from the state -- which amounted to €511m last year.
But the Department of Social Protection is set to pass on the names and addresses to the Revenue of the 119,000 landlords out of a potential 150,000 who failed to supply their PPS numbers last year.
At the Public Accounts committee, Labour TD Roisin Shortall said the response from landlords -- who previously had not been required to supply their PPS numbers -- had been extremely disappointing.
"The landlords have 21 days to reply. All of those people should have complied, given that we're four months into this year," she said.
The Government moved to change the law in 2007 after the state spending watchdog described the Revenue's arrangements for collecting tax from landlords who receive money from the state as "haphazard and inefficient".
Fine Gael TD Jim O'Keeffe said the committee had repeatedly highlighted the need to take action in this area.
"We want landlords to render unto Caesar what is Caesar's rather than it going into the black economy," he said.
Department of Social and Family Affairs secretary general Bernadette Lacey confirmed that her officials were now obliged to ask for landlords' PPS numbers. But she said she could not stop the payment of rent supplement to landlords who had not supplied their PPS
numbers -- because the payment
is first given to the tenant, who then passes it on to the landlord.
"I can neither force the landlord to give me the number, nor can I stop the payment of rent supplement," she said.
Ms Lacey said the first set of data from the last six weeks of 2008 had shown that 79pc of the 4,200 landlords contacted had supplied their PPS numbers.
She expressed the hope that the percentage of landlords complying for the 2009 year would increase from the current level of 20pc to 80pc.
The data will not be available until the end of this year due to a request from the Revenue.
The rent supplement scheme is designed to provide short-term support to people who do not have the money to rent their own place, and who do not have any other accommodation available.
Single people accounted for around 55,000 (58pc) of the 93,000 people on the Rent Supplement scheme last year, with married people accounting for 20,000 (21pc).
The state spent a total of €511m last year -- an average of around €5,500 per tenant -- and is expecting to spend another €500m this year.