# Rabo charged me 27% dirt on interest for 2010 instead of 25%



## Godfather (1 Jan 2011)

I'm so surprised when I saw the tax on my interest this morning...

And according to this webpage the  27% rate should kick in only from January 2011:
http://www.citizensinformation.ie/e...vestments/deposit_interest_retention_tax.html

Weird!!!  I'll be contacting them asking for an explanation... Or am I missing something?


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## camlin90 (1 Jan 2011)

27% tax on 2% versus 25% tax on 3.1%... ahhh... the joys of being patriotic and sticking with Anglo  happy new year everyone!


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## Tintagel (1 Jan 2011)

Good spot Godfather. Let us know how you get on.


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## iamaspinner (1 Jan 2011)

We've also been charged 27%. Surely it must be a mistake. The operation date is 31-12-2010. Not much difference in my case but, since I'm sure they won't give everybody's overcharged moneys to charity, I prefer to have it in my account!


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## sulo (1 Jan 2011)

I was also charged 27% dirt by Rabo.
I have sent them a message via their message feature on the online account.


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## JoeB (1 Jan 2011)

Would the affected people be happy if Rabo reduced the DIRT only for those customers who complained?, or would people be asking that the correct rate is applied to all customers?

I feel it may be hard to correct this,.. I believe it hinges on whether or not the Fin. Reg. takes up the case... and he may not.


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## Lightning (1 Jan 2011)

DIRT is charged based on the pay date, it is not accrued like interest. 

I know the Rabo entry states December 31st 2010, but was the interest paid or visible in your account on December 31st 2010 or was it only visible on January 1st 2011 ?


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## sulo (1 Jan 2011)

Is it?

PTSB put through my DIRT/Interest on my account which is dated paid 4th jan 2011 - but it was put through at 25% dirt.


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## Lightning (1 Jan 2011)

Yes it is. For example, if you have a 2 year term deposit and the maturity date is January 15th 2011 then you will pay 27% on the interest for the full 2 years.


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## sulo (1 Jan 2011)

Well that doesn't explain why PTSB put it through at 25%.


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## pudds (1 Jan 2011)

This is a bitter pill to swallow for anyone caught by this particularly by the 31st/1st. Later on you could understand. 

Anyone know what Northern Rock has done!


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## twofor1 (1 Jan 2011)

2010 interest not yet showing on my N/R A/c.


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## pudds (1 Jan 2011)

twofor1 said:


> 2010 interest not yet showing on my N/R A/c.




thanks fwofor1 I locked myself out...mind you it only gave me the one chance to get it right for some reason this time.


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## twofor1 (2 Jan 2011)

Interest has now appeared on my N/R A/c today, 02/01/11, entry date is 31/12/10, DIRT was deducted @ 25%.


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## Godfather (2 Jan 2011)

CiaranT said:


> I know the Rabo entry states December 31st 2010, but was the interest paid or visible in your account on December 31st 2010 or was it only visible on January 1st 2011 ?



I don't see why there should be a difference. Interest were showing on 1st January 2011 (pls note: Saturday which is not even an ordinary working date) with 31st December 2010 as effective (i.e. official/legal) date of accrual.

I just want my difference of 2% back, the law is at my side. I'll also have a chat with the Financial Ombudsman, this is not fair. Thank God I had the calculator.

It's not such a big difference in terms of money of course... But in Italy we say "clear pacts, long friendship" and I'm a Godfather...


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## theresa1 (3 Jan 2011)

DIRT was deducted at 25% on my Anglo Premium Demand A/c and my Anglo 1 year fixed term reward a/c opened last year shows accrued interest net less the 27%.


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## Lightning (3 Jan 2011)

Godfather - I agree that in theory it should not make a difference. In reality, banks apply DIRT using different pay date methodologies. 

Let us all know how you get on with your complaint with Rabo.


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## Barney Magoo (3 Jan 2011)

CiaranT said:


> In reality, banks apply DIRT using different pay date methodologies.



I find this very strange, surely this tax should be more clearly defined and standardised across all institutions.
My Rabo account had DIRT deducted at the 2011 rate too, so probably all accounts were. 
The obvious implication is that it will be done at the 2012 rate for interest earned in 2011.


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## dtlyn (3 Jan 2011)

I requested clarification also, as I have suffered the same wrt Rabobank DIRT. 

That I would be charged 27% DIRT for interest accrued in a year where 27% DIRT was not yet applicable appears to me like a retrospective taxation.


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## Godfather (4 Jan 2011)

I contacted Rabo (long waiting probably because of the issue) and was said that the issue is being corrected as we were speaking. I also suggested them to issue a public apology on their website, I got a positive reply about it as well.


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## RaboDirect (4 Jan 2011)

*We’re Sorry!*

The truth is....we messed up! We applied the new 2011 rate of DIRT tax, 27%, on all accounts subject to DIRT on the 31st of December 2010 when we should have applied the 2010 rate of 25%. 

Honestly? It was a system glitch. But we’ll save you the lame excuses and system spiel and instead tell you the good news which is....all customers are due a refund. 

We hope to have all revised interest payments calculated on the correct DIRT rate, back in affected accounts by the end of the week. And no days interest will be lost. We’re just working out how quickly we can get this all sorted. 

So sorry again!

RaboDirect


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## Lightning (4 Jan 2011)

Godfather - Fair play to you for raising this and getting it sorted. Looks like the pay date had nothing to do with it after all. 

Rabo - Thanks for your post and honesty about the situation.


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## Godfather (4 Jan 2011)

Rabo, pls post a public apology on your website! Thanks.


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## sulo (4 Jan 2011)

So Ciaran T was wrong.


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## pudds (4 Jan 2011)

It seemed so cleary unfair I felt it must be a mistake.  Great result.


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## weston68 (4 Jan 2011)

*Nationwide Also Charge 27% DIRT*

Nationwide UK have also charged 27% DIRT on interest applied on 31/12/10. I've sent them a note to let them know.


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## theresa1 (4 Jan 2011)

This alone would stop me from moving money into RaboDirect.


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## MONAGHANSG (5 Jan 2011)

I have the same issue with my Nationwide UK easy access a/c, will be contacting them too...


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## Lightning (5 Jan 2011)

weston68 said:


> Nationwide UK have also charged 27% DIRT on interest applied on 31/12/10. I've sent them a note to let them know.


 
Well done Weston. Let us all know how you get on.


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## Tintagel (5 Jan 2011)

Pity it took an AAM member to point this out to Rabo. Why didn't they spot it. It really makes you wonder.


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## peterwilson (5 Jan 2011)

I called them.
Girl said that they have issued an email and are processing refunds asap.


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## dtlyn (5 Jan 2011)

That's grand, these things happen. Happy enough with that customer experience, to be honest.


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## UFC (5 Jan 2011)

Tintagel said:


> Pity it took an AAM member to point this out to Rabo. Why didn't they spot it. It really makes you wonder.


 
No offence to bank staff, but as someone who briefly worked in a bank I noticed they want to hire people who will do as they're told and who don't think too much or question things...


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## peterwilson (5 Jan 2011)

Isn't it funny how bank errors are ALWAYS made in the banks favour?

Nope actually not funny at all.


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## pudds (5 Jan 2011)

peterwilson said:


> Isn't it funny how bank errors are ALWAYS made in the banks favour?
> 
> Nope actually not funny at all.



yeah funny for them all right but in this case they wouldn't have gained as the 27% would have been just passed on to revenue.


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## weston68 (5 Jan 2011)

*Response from Nationwide UK Irl*

Just got the following response from Nationwide UK Irl. Not quite as grovelling as Rabo but same result except that I have to wait till next interest payment date for the correction to be made.

I'm still amazed that their own checks and balances do not catch these errors. What are their accountants and auditors doing? Is it because both Rabo & Nationwide UK Irl are both non Irish banks and DIRT is a foreign concept for them?


_Due to a system error on the evening of December 31st the incorrect DIRT rate was indeed inadvertently applied to your December account. As you have correctly pointed out the DIRT rate which should have applied up to that date was 25% and as of January 1st 2011 the new rate is now 27%. We are currently working on remedying this problem and can assure you that the entire issue will be resolved prior to your next interest payment thus having no negative impact on your account. Our backdated remedy will ensure that the interest which was paid on December 31st was subject to the lower DIRT rate of 25%._

_I would like to take this opportunity to thank you for highlighting this issue and to apologise on behalf of Nationwide UK Ireland for any inconvenience it may have caused._


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## Godfather (5 Jan 2011)

peterwilson said:


> Isn't it funny how bank errors are ALWAYS made in the banks favour?
> 
> Nope actually not funny at all.



Ahahahaha! 

+1!


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## dtlyn (6 Jan 2011)

Godfather said:


> Isn't it funny how bank errors are ALWAYS made in the banks favour?
> 
> Nope actually not funny at all.!



Nah, you just forget about those a lot quicker - if you hear about them at all. For example, BOI ATMs got generous a few weeks ago. 

Also, in terms of PR, what bank would chase people en mass that it has undercharged?

I don't work in a bank or anything, I can just imagine it's no peachy deal at the moment- on the front line at least.


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## SS expert (6 Jan 2011)

I have a 1 year fixed account due to expire in Feb 2011.
Will this be at the 27% rate, or will it be broken into two rates?


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## MONAGHANSG (7 Jan 2011)

SS expert,

I'd expect it to be at the new rate 27%, as the rate is based on pay date.


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## dtlyn (7 Jan 2011)

MONAGHANSG said:


> SS expert,
> 
> I'd expect it to be at the new rate 27%, as the rate is based on pay date.



Interesting. Are there any online resources that defines this an what pay date actually means ( DIRT pay date? ). 

This would be particularly busing for somebody coming out of a 5 year term deposit.

I would demand interest accrued for for each year be charged at the prevailing rate for the year.

Perhaps this is another threads discussion. 

As an aside I got my overcharged DIRT back.


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## Lightning (8 Jan 2011)

I spoke to a tax expert the other day and mentioned the Rabo apparent mistake in deposit interest. 

He confirmed that DIRT is charged based on the pay date and not the accrual period. 

Rabo have no right to back date interest tax. It all depends on when they pay it. If Rabo paid the interest in 2011, as appears to be the case, then the rate should have been 27%. 

Hence, he was of the opinion that Rabo should not have issued refunds to customers as the interest was paid in 2011.

Have Rabo made a mistake by refunding the tax? Was the interest visible (not value dated) in accounts on December 31st?


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## twofor1 (8 Jan 2011)

If this is the case N/R are wrong as well, no 2010 interest was visible in my A/c on 01/01/11, it only appeared on 02/01/11 with a value date of 31/12/10, DIRT was deducted at 25%


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## MONAGHANSG (9 Jan 2011)

Nationwide UK has now refunded the difference in DIRT rates on my a/c. So looks like you don't need to wait until next pay date with them after all.


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## dtlyn (10 Jan 2011)

CiaranT said:


> I spoke to a tax expert the other day and mentioned the Rabo apparent mistake in deposit interest.
> 
> He confirmed that DIRT is charged based on the pay date and not the accrual period.



Very interesting. Pre April 2009 this was 23%, we are now at 27% which is particularly bad for those locked into Term Deposits for a period longer than 1 year.


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## homeboy (10 Jan 2011)

I have a Nationwide UK savings account - interest next payable on 31/03/2011 - when the effective DIRT rate is 27%

However, couldn't Nationwide UK (or any financial institution) calculate interest to 31/12/2010 and deduct *25%* DIRT on that and then apply the 27% rate for the period Jan to March.  It would be extremely popular with customers and great PR for them.  I'm sure something similiar happened yonks ago when DIRT rates changed (and it really was a very long time ago).


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## cloughy (10 Jan 2011)

then they would have to pay interest on interest, and you locked away your money for that time, and they fixed their side of the deposit with the external market. 

What if Dirt rates went down, would you still want the same to apply, or keep the rate on the date of deposit maturity. 

When you enter into a deopsit, you should be aware(and probably explicitly stated) that Dirt at the prevailing rate will apple on the maturity of the deposit.

You have netered into a legally binding contract, so would be unlawful of them to amend the T&C's, as what if interest rates move, should they be allowed to change your rate, dont think so, amending the T&C's to pay lower rate of Dirt would not go down well with the Revenue commissioners.

Afraid you lose out for fixed deposits thta straddle the 2 different Dirt tax rates when rates go up, and gain when they fall.


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## iamaspinner (10 Jan 2011)

Nationwide UK have the option of monthly or annual interest in their Easy Access Savings account. The rate in the monthly case is just a little lower, but I suppose it could be offset against potential loses as in this year's case. But I also suppose the opposite could happen if DIRT was decreased...


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## TSThomas (11 Jan 2011)

peterwilson said:


> Isn't it funny how bank errors are ALWAYS made in the banks favour?
> 
> Nope actually not funny at all.



You mean governments favour? It was DIRT after all 

Relatedly... Irish Nationwide, Anglo & PTSB deducted 25%


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