The Revenue Commissioners of Ireland have commenced issuing instructions to employers and pension providers to process deductions of outstanding Local Property Tax (“LPT”) or Household Charge arrears (which are now collected through the LPT system) from the net wages or occupational pension of their employees or pension recipients, as appropriate. This applies to those who have unpaid Household Charge and/or LPT liabilities, collectively referred to as “the LPT”. This enforced collection of the LPT will occur where a property owner’s LPT Return and/or LPT payments are outstanding, or where the payment method chosen is not honoured by that property owner.
On receipt of an instruction from Revenue, employers and pension providers are obliged to commence the mandatory deduction at source of LPT arrears from the employee’s net wages or the pension recipient’s occupational pension, as appropriate, in the next pay period and they will be required to spread the deductions evenly over the remaining pay periods in the year.
Where an employer or pension provider is unable to deduct and remit the total amount of the outstanding LPT before the end of the period specified in the instruction from Revenue due to, for example, an insufficiency of wages, the employer or pension provider is required to notify Revenue accordingly as soon as he or she becomes aware of this.
Employers and pension providers are accountable for the amount of LPT deductible and they are liable to remit that amount to Revenue in the same manner and at the same time as the remittance of income tax under the PAYE system of deduction of tax at source. Should employees or pension recipients subsequently wish to make payment other than by deduction at source by their employer or pension provider, they must first agree an alternative payment option with Revenue and deliver a true and complete LPT Return to Revenue Commissioners. Once Revenue has agreed a new payment method with the relevant property owner, it will send an instruction to the individual’s employer or pension provider to cease deducting LPT from that individual’s wages/occupational pension. The amount of LPT already deducted from the employee’s wages or the pension recipient’s occupational pension will then be taken into account in computing the balance of the LPT liability due by that individual.
Employers are obliged to record any LPT deduction on an employee’s payslip.