Tuesday 21 November 2017

All you need to know about paying the property tax

Josephine Feehily, the Chairman of the Revenue Commissioners
Josephine Feehily, the Chairman of the Revenue Commissioners
Charlie Weston

Charlie Weston

THE tax authorities have been insisting that homeowners do not have to pay their property tax before Christmas.

But people who pay by credit or debit card will have to pay -- and could end up shelling out between ¿200 and ¿400 for the tax just as the festive season and its associated spending kicks in.

It also means they are effectively paying twice in the same year having already shelled out for six months of the tax in 2013.

Here we explain the different payment methods, so people avoid having to pay property tax before Christmas.

Close to one million homeowners were shocked to get a poorly written letter warning them that if they choose to pay by cheque, credit card or debit card they will end up handing over the money this month.

If you received the letter and a payment-options form from Revenue, you need to send a completed form back by this Thursday if you are filling out the form by hand.

You have until Wednesday, November 27, if you opt to change how you want to pay the 2014 property tax by filing out the details online.

If you do nothing, then Revenue will assume you want to pay the tax the same way you did earlier this year.

Here are the six different options for paying what Revenue calls the LPT (local property tax).

One-off method gives you more time before handing over cash

Few had heard of a single debit authority until the officials in Revenue introduced it as a way of paying the property tax.

But it might be worth your while getting familiar with this concept, as paying by this method will mean you have more than four months before you have to pay the dreaded tax.

A single debit authority is similar to a direct debit, except it is a one-off payment.

With a direct debit, you give your bank the authority to pay over money whenever it is demanded from the company that has signed you up for the direct debit arrangement.

A single debit authority is a sort of electronic cheque. You are giving your authority for a single debit to be made from your bank account in favour of Revenue.

This involves filling out a form at the bottom of the property tax return, giving the name of your bank, your bank account number, sort code and the amount of property tax you owe.

It authorises the bank to make a once-off payment to the Revenue.

The big advantage is that the payment date is much later for this payment method – it is March 21, 2014.

As it is one-off, Revenue will need you to renew the authority each year if you wish to continue paying this way.

Paying at till gives you control – but it will cost you more

This allows the local property tax to be paid in cash at An Post, Omnivend self-service kiosks or at Payzone outlets.

Payments can also be made using debit/credit cards.

Payments must be made weekly or monthly, with the taxpayer liable to calculate the payments.

The service providers charge a commission for the service.

You do not have to stick with the same payment provider.

You can switch between payment-service providers at any stage.

To make your payment through any of the payment service providers, you will need either the property ID (identification number provided by Revenue) or you can use the PPS number of the owner.

You should retain the receipt provided by the payment service provider.

An Post charges €1 per transaction.

Omnivend imposes a 4pc charge per transaction of the amount paid.

With Payzone, there is a charge of 75c per transaction for amounts up to €50, a €1 fee for transaction amounts from €50.01 to €100, and a €2 fee per transaction for amounts over €100.

You should start making your payments through a service provider from January 1. Revenue says you should ensure you pay your total tax due for 2014 by the end of 2014.

"The payments should be equal amounts and should be paid according to the payment frequency that you selected," a spokeswoman for Revenue said.

Those who want to pay by credit card or debit card, but do not want the money taken out immediately, can opt for a service provider and not actually make the first payment, or the full payment, until it is due on the first day of January.

Use a card and you'll pay now - and incur a small fee

Revenue officials appear to have been shocked that so many people chose last summer to pay this year's tax by using their cards.

So now those who again choose this method face having to pay up this month – a full four months earlier than those who opt for a single debit authority method of paying.

The problem has arisen because Revenue is demanding that if people indicate in the paper or online forms that they want to pay by credit card or debit card, the tax officials want the card details.

This means the payment will come out as soon as Revenue gets the forms back with the card details.

Private sector tax experts say what is going on here is an attempt by the tax authorities to discourage people from using credit cards and debit cards.

Officials in Revenue were understood to have been taken aback that six out of 10 people who paid the tax last summer used a card or a cheque.

What all of this amounts to is that those who want to pay by card and fill out a form manually by the deadline of next Thursday will see the money going to Revenue within days of the tax officials getting the form back. Those filing online will see the payment taken some time after November 27.

So don't get caught on this. Revenue has refused to say why it won't separate the date by which householders must say how they intend to pay next year's tax from the credit/debit card payment date.

A spokeswoman would only say that because of data protection, Revenue will not retain card details. Also worth noting is that there is a 1.49pc "administrative charge" for paying by credit card.

Give your bank authority to make 12 monthly instalments

A direct debit gives authority to your bank to make a payment to a named company or government agency.

You are essentially instructing the bank to pay the tax in 12 monthly instalments. If you opt for this payment method then the first amount will come out of your bank account on January 15.

Taxpayers need to supply Revenue with the name and address of their bank, the account number and sort code.

You will also need to supply your PPSN (personal public service number).

Spreading payment evenly over course of the year

Payment is spread evenly over the year, with automatic renewal each year.

Revenue favours this method of payment as there is a certainty that it will get its money every month.

And if there are any problems, Revenue officials will be able to use its considerable powers to lean on employers without having to deal with consumers.

It is easier to deal with one employer, where there may be hundreds of workers having the tax taken from their wages, rather than hundreds of individual consumers.

Head of taxation at Chartered Accountants Ireland Brian Keegan said it had been proven in the past that there were higher compliance levels when a tax was taken from wages or pensions.

Deduction at source involves the tax being taken from your salary, pension or farm scheme payment once a month.

The first of 12 separate payments from your pay or pension will start in January next year.

To opt for this method you choose the deduction at source option on the paper form, or online.

You must provide the employer's name and tax registration number of your employer or pension provider.

You will find this on your pay slip or pension receipt.

If you want the tax to be taken out of your farm payment, then you need to provide your name, PPS (personal public service) number and herd number.

Option of paying immediately or on due date in January

Thousands of people paid by cheque last summer.

There are two methods of paying by cheque, with one leaving you the option of not paying until the tax is due in January. If you write out a cheque as you would normally, the money will be deducted from your bank account as soon as it is lodged by Revenue.

To pay this way you need to fill out the amount of property tax due for next year in the section headed/online box "Total Amount Due".

Confusingly, this is under the section which says "Single Debit Authority" payslip at the bottom of your payment-instruction form.

Make the cheque/postal order payable to the Collector General.

Send your cheque/postal order and your LPT1A payment-instruction form to Revenue, LPT Branch, Post Office Box 1, Limerick, by November 4, 2013. You can also choose to send your cheque/postal order after November 7. But remember it's due on January 1. What you need to do is detach the "Single Debit Authority" payslip at the bottom of the LPT1A payment-instruction form.

You will need to include a note on the LPT1A payment instruction form that you will pay by cheque/postal order on or before January.

Send back your LPT1A payment instruction form to Revenue by next Thursday.

Record the amount of property tax due for 2014 in the "Total Amount Due" box on the Single Debit Authority payslip.

Make the cheque/postal order payable to the Collector General.

Crucially, you will also need to make sure your Property ID is written on the back of the cheque/postal order. Send your cheque/postal order and Single Debit Authority payslip to Revenue, LPT Branch, Post Office Box 1, Limerick, on or before January 1, 2014.

Irish Independent

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