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Will I pay stamp duty when cancelling a credit card?

Q Helen from Dublin contacted Smart Consumer with a query about the stamp duty payable on her credit card. She has a credit card she doesn't use and so several months ago decided to close the account.

However, as she had already paid the stamp duty, it was suggested to her that she keep the account open until the end of year (April 1, in this case), which she did. Last week, she contacted her credit card provider to tell them she was closing her credit card account, but to her surprise she discovered she would have to pay stamp duty again before her account was closed. She wants to know if this is correct.

A Stamp duty of €30 is payable on your credit card each year on April 1, but the duty is paid in arrears. This means it is correct that Helen is being charged more stamp duty now as she is paying for the preceding year.

However, if you are changing to a different credit card account, the Financial Regulator advises that you don't have to pay the duty more than once. To make sure you don't, ask your credit card issuer for a 'letter of closure' when you are closing the account. This letter states you have paid stamp duty for the year, so send this to your new credit card issuer and you will not be charged by them.

You can change your account as often as you like during the year without paying extra duty as long as you send a 'letter of closure' to the new card issuer each time. Furthermore, if you close your credit card account without ever having used it, you won't have to pay any stamp duty, providing you close the account in the same tax period as it was opened.

Q Following on from Sean's positive experience with his broadband provider last week, Sue in Dublin got in touch to tell us how impressed she was with a Dublin city centre restaurant.

After dining at there recently, she suffered a tummy upset and contacted the restaurant to tell them so. She says they took the time to listen to her complaint and to adequately explain what the problem may have been. They were very apologetic. The restaurant then gave her a full refund of the meal for two, and also gave her a €50 voucher for the restaurant.

Sue says "the customer service I received was excellent, and they took the trouble to find out what may have caused the problem and to call me back with an apology". Given this positive experience, Sue is delighted to go back to the restaurant to eat again.

A Sue's experience goes to show what good customer service is about and how it can build a loyal customer base. Retailers and service providers please take note.

  • In relation to last week's Smart Consumer about the difficulty in claiming back taxes and charges when you don't fly, the office of Fianna Fail TD Michael Kennedy, and member of the Oireachtas Transport Committee, got in touch to tell us about his idea for unclaimed air travel taxes.

The idea, which he has proposed to Finance Minister Brian Lenihan prior to next week's supplementary Budget, is that airlines establish a special air tax client bank account and return the air tax on cancelled or 'no-show' flights back to the Government on a three-monthly basis. Mr Kennedy said "it is vital that we ensure these surplus funds go back to the Government for essential services and not into the airlines' pockets".

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Smart Consumer agrees that the airlines should not keep the money collected for taxes when not used, but if they are given back to the Government where does this leave the consumer? This money belongs to the passengers and the taxes and charges are owed to them if they don't fly.