No "Case V" deduction for Household Charge
Has the position with regard to the House Hold Charge been clarified?
Has the position with regard to the House Hold Charge been clarified?
No "Case V" deduction for NPPR and the Household Charge.
- Thread starter mandelbrot
- Start date
My accountant is of the chartered variety and when this was introduced first he told me to submit them and he would put it under misc sundries (or somesuch)
I wasn't really comfortable with that but let it ride but the next year when he asked for them I declined to claim it until the position was properly clarified,glad I did now but I wonder how many others got this advice not just off my fella but off other accountants?
mandelbrot
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Unfortunately not yet, as the IT70 leaflet only mentions the NPPR.
But since the bulk of this discussion has been about both NPPR & HC, maybe the thread title should be amended accordingly....?
Gekko - Every piece of advice on this stemmed from one source and one source only which was, in October 2010, a letter between Revenue and the Institute of Taxation (or whatever is the correct title). The latter body then issued a statement saying that "Revenue has indicated that NPPR is not tax deductible"-which other accountancy bodies started quoting.
Revenue's position -contrary to your assertion - was never clearly stated
If you believe that this is a fair,democratic and transparent basis on which taxation decisions can be made I beg to differ.
Believe it or not, there are thousands of people,including landlords, who make tax returns without tax-accountants' aid. Not all of them read AAM or similar sites.
Those of them who choose to seek information may have turned to the Revenue's own guidance -leaflets, websites etc - where no advice on NPPR was given, the only advice was that local authority rates were deductible.
Some people may have even read the relevent Act which I believe can be interpreted either way as regards NPPR deductibility.
As a directly relevent analogy:- two years ago Revenue issued rules and regulations on the Travel Agents Margin Scheme - basically the introduction of VAT in the travel trade. Some of us travel agents questioned the rules. Within a few months Revenue re-issued the guidelines because Revenue (can you actually believe this Gekko?) admitted they were wrong. (In fairness to Revenue it does state on their wesbite that they had to change their recently issued guideline due to their incorrect understanding of the prevailing law).
During this period of disagreement with Revenue travel agents' accountants said that we must follow the Revenue guidelines (which in this case were actually published,unlike NPPR deductibility advice). It was left to individual travel agents and their trade body to point out that the original guidelines were wrong. No accountant raised his head above the parapets and argue with Revenue.
As accountants have told me -and as some have stated online - they believe this NPPR rule is nonsense , but ,frankly, they just weren't able/capable/wouldnt fight it.
And to answer questions on this :-I intend still to declare openly on my self assessment that I am/have deducting/ed this. I will welcome at least the opportunity to discuss this at various levels with Revenue.
I feel the worst that will happen is that I'll pay a bit of tax and possible a smidgen of interest. (i may even get a refund iif properly audited as I know I let slip several expences!).
At best -with a bit of legal help -who knows ?
Last word-its not the NPPR per se that should worry all landlords. Its adding in the property charge which could quickly increase to large amounts that is the real worry.
I've already paid them for each of my properties this year .And yes I'm deducting this as an expence and saying so.
Revenue's position -contrary to your assertion - was never clearly stated
If you believe that this is a fair,democratic and transparent basis on which taxation decisions can be made I beg to differ.
Believe it or not, there are thousands of people,including landlords, who make tax returns without tax-accountants' aid. Not all of them read AAM or similar sites.
Those of them who choose to seek information may have turned to the Revenue's own guidance -leaflets, websites etc - where no advice on NPPR was given, the only advice was that local authority rates were deductible.
Some people may have even read the relevent Act which I believe can be interpreted either way as regards NPPR deductibility.
As a directly relevent analogy:- two years ago Revenue issued rules and regulations on the Travel Agents Margin Scheme - basically the introduction of VAT in the travel trade. Some of us travel agents questioned the rules. Within a few months Revenue re-issued the guidelines because Revenue (can you actually believe this Gekko?) admitted they were wrong. (In fairness to Revenue it does state on their wesbite that they had to change their recently issued guideline due to their incorrect understanding of the prevailing law).
During this period of disagreement with Revenue travel agents' accountants said that we must follow the Revenue guidelines (which in this case were actually published,unlike NPPR deductibility advice). It was left to individual travel agents and their trade body to point out that the original guidelines were wrong. No accountant raised his head above the parapets and argue with Revenue.
As accountants have told me -and as some have stated online - they believe this NPPR rule is nonsense , but ,frankly, they just weren't able/capable/wouldnt fight it.
And to answer questions on this :-I intend still to declare openly on my self assessment that I am/have deducting/ed this. I will welcome at least the opportunity to discuss this at various levels with Revenue.
I feel the worst that will happen is that I'll pay a bit of tax and possible a smidgen of interest. (i may even get a refund iif properly audited as I know I let slip several expences!).
At best -with a bit of legal help -who knows ?
Last word-its not the NPPR per se that should worry all landlords. Its adding in the property charge which could quickly increase to large amounts that is the real worry.
I've already paid them for each of my properties this year .And yes I'm deducting this as an expence and saying so.
T McGibney
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Sums up perfectly why experienced accountants are always reluctant to stick their necks out when dealing with Revenue on client affairs. When things go well, the client benefits. When things go wrong, the accountant gets blamed, normally totally out of context, as above, and their reputation is often impugned.
From my extensive reading of this entire issue, don't automatically assume that your accountant's advice was wrong. He may in time be proved right. If so, will you then thank him?
T McGibney
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Revenue forms, leaflets and website are never definitive, as per Revenue.
I'm sorry but I have no idea what point you are trying to make?I do not ask an accountant to stick their neck out whatsoever,what I do want is a competent professional who will complete a tax return compliant with the revenue rules and regs and that will stand up to an audit.
Surely if there was any doubt about the legitimacy of claiming this the accountant should have advised me to hold off til clarification was given?
I am not an accountant I hire those that are in order to best advise me,second guessing him has proven me to be correct not him,had I gone along with this I would now be in a position where I would have to repay Revenue a serious amt of money.
How will he be proven right in time and I will thank him?clarification has now been given that the NPPR is not deductible as an expense or am I living some Kafkaesque nightmare?
There are plenty of items in everyday taxation which are not black or white and require some professional interpretation of the relevant legislation.
Just because Revenue have decided that their interpretation of the legislation is that the NPPR isn't tax-deductible doesn't necessarily mean that it will hold up in court. It is hardly surprising that they have interpreted it to their benefit.
Ultimately one day it will be up to the courts of the land to determine whether the NPPR is tax deductible or not.
So your accountant may very well end up being proved right, in the long run.
I suspect he will be.
T McGibney
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No need to jump down my throat, bold text and all
There is genuine uncertainty as to the validity of Revenue's position in this case. This remains notwithstanding the amendment to IT70 which has just now emerged.
His position has in no way been 'proven incorrect'
If your accountant had told you not to file your return until the matter was clarified, your 2009 return would still be outstanding, leaving you open to prosecution.
The tax system, and its administration, is indeed Kafkaseque in many respects. Particularly for those of us who work with it every day of the week.
I think your accountant was foolish to advise you as he did, for the reasons I set out above.
This is just going to run and run...
However this is where I jump off,as far as I am concerned the Revenues position is now clear,I may not like it but there it is.It seems a strange way to identify the NPPR (given that confusion also arises with the fact that you don't need to own 2 homes to be liable to it.) I don't know why they couldn't just call it the Non-Principal Private Residence NPPR levy to avoid any further confusion.
mandelbrot
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It's a bit strange alright, maybe reflective of the vernacular of whoever wrote the piece, but the relevant identifier is the "introduced by the Local Government (Charges) Act 2009" part. There can be no ambiguity about what charge it is.