The Revenue Commissioners have recently issued a reminder to employers and pension providers of their obligations in relation to deduction at source (DAS) of Local Property Tax (LPT) from wages, salary or an occupational pension.
Employers and pension providers are obliged to collect and account for LPT on behalf of employees when instructed to do so by Revenue. The instruction is issued by means of an Employers’ Tax Credit Certificate (Form P2C) and the employer or pension provider must implement the instruction through their payroll system and return the LPT through their P30 and P35 returns.
Where an employer or pension provider has received such a P2C notification for an employee or pension recipient for the 2013 LPT tax year but failed to implement the instruction, the employer or pension provider should immediately rectify the situation by filing amended P35 and P35L returns and paying any balance outstanding.
Where a P2C instruction was received but the employee or pension recipient had ceased before the instruction could be implemented, then the employer or pension provider should have filed a P45 in the normal way. Where for any reason, an employee or pension recipient did not receive payments after receipt of the P2C instruction (e.g. an employee who is a long-term absentee from the employment), then the employer or pension provider should notify Revenue of this fact. This notification should be sent to Revenue at LPT Branch, P.O. Box 1, Limerick or emailed to firstname.lastname@example.org
For the 2014 tax year, P2C instructions are continuing to issue in relation to LPT for 2014 and arrears of 2012 Household Charge (HHC). These amounts should be deducted in equal amounts over the remainder of the tax year.
Non-operation of instructions and failure to pay over LPT as instructed renders the employer or pension provider liable for the amount due and may result in interest charges, penalties and refusal of a tax clearance certificate. It also increases the chances of a tax audit.
It is advisable therefore to ensure that P45s have been issued where employees or pension recipients have ceased and that Revenue is notified immediately of any difficulties in collection of LPT for the remainder of the tax year.
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