The introduction of Local Property Tax (LPT) in last year’s budget provoked much outrage and opposition. Marches, public meetings and demonstrations were staged in many parts of the country to protest against the new tax. One of the more popular suggestions was to boycott LPT but all of this noise and bluster was in vain as the measures introduced by the tacticians in Revenue were decisive in ensuring almost total compliance.
When planning the implementation of LPT, Revenue paid particular attention to the payment option “deduction at source”. Although only 5% of compliant taxpayers would eventually opt for this particular payment method, the crucial issue was that nearly all non-compliant taxpayers would be caught in this net. “Deduction at source” in the main refers to deduction from salaries or pensions.
The consultation process between Revenue, the payroll software companies and their representative body PSDA (Payroll Software Developers Association) was detailed and ensured that the mechanics of the LPT deduction in payroll was clear and simple. One of the main reasons that the start date was deferred until 1st July was to ensure the readiness of both Revenue and the payroll software companies for the new deduction.
Just this week, Revenue is preparing to issue P2Cs to employers containing updated LPT amounts. Many of the amounts will be enforcement estimates. Employers will not be able to tell the difference between normal LPT and enforcement LPT. The employers receiving these P2Cs have no choice but to comply, otherwise they will become liable themselves in much the same way as if they failed to deduct PAYE or PRSI.
No matter how militant an employer might be against LPT, it is unlikely that they will risk becoming liable for it on behalf of their employees.
All of the anti LPT campaigners advocating non-compliance really had no chance from the outset when pitted against the Revenue strategists.