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Homes to pay more for bin collection as EU insists on VAT

CASH-strapped householders will have to pay more for local authority services through the imposition of VAT, it has emerged.

The consumer tax is to be levied at up to 21pc on services such as bin collections, car parking and swimming pools.

The European Court of Justice ruled against Ireland over the failure of public bodies to charge the tax, Dublin City Council said.

Judges found it was unfair that private companies competing against local authorities for the provision of services had to impose VAT, while the council did not.

Dublin City Council said it still had to be decided at what rate the different services would be charged -- 13.5pc or 21pc.

It said the Department of Finance was drafting legislation which would be incorporated into the Finance Act 2010.

The laws will oblige public bodies to charge VAT on certain services, the council added.

This will lead to higher costs to the consumer.

Private bin collection companies already pay VAT. The tax will apply to all local authority services other than ones like assessing planning applications, which is part of a council's statutory function.

Commercial water charges would also be considered for VAT. These higher charges are likely to be passed on to consumers and could be imposed from as early as July.

The Revenue Commissioners wrote to all local authorities seeking lists of all goods and services they provide to the public or to businesses at a cost.

This was so the services can be assessed for VAT. The levy could also be applicable to domestic water charges if they are eventually introduced.

Dublin City Council's head of finance Kathy Quinn said, regardless of which rate of VAT was applied, the costs could not be absorbed by the local authority.

In Dublin city, the current maximum annual bin charge most householders would face is €304.

If VAT was applied at 21pc, the fee would increase to €367.84.