DIRT deducted at previous rate but net interest lodged in current year

J

jpd

Registered User
Messages
3,880
I notice that Permanent TSB credit my savings account on 2nd January each year with the net interest earned in the previous year.

They deduct DIRT but use the previous year's rate eg on 2nd January 2020, they calculate the interest earned as € 100, for example, and then deduct DIRT at 35% so they only credit € 65 to my account.

DIRT in 2020 is 33% so shouldn't they credit my account with € 67

How much do they turn over to the Revenue € 33 and pocket the difference?

I will include this in my 2020 tax return as I certainly did not receive the interest until 2020
 
Is the €100 interest not related to 2019 calculated on last day of 2019 - just posted to your account on the first day of 2020
 
EmmDee said:
Is the €100 interest not related to 2019 calculated on last day of 2019 - just posted to your account on the first day of 2020
Click to expand...
The 'relevant date' is the date it is paid or credited. If it was posted on 31st it should have been at old rate.
 
I have asked them but awaiting an answer....

I agree with RedOnion, the DIRT rate should be the rate on the day the interest is posted to the account
 
The DIRT rate applicable is based on the day the bank pays.

I suspect PTSB paid this automatically late on 31 December 2019 at the old rate but it only got received into accounts for value date 2 January 2020. Hence, PTSB used the old rate. Ideally PTSB should have back dated the payment.
 
They have contacted me and will look into it and get back

I understand the mechanics but really they should either date the credit 31 Dec and not 02 Jan or use the correct rate

I seem to remember that Ulster Bank had the same problem in the past but they switched the interest credit date from End year to mid April or something like that which was one way to solve the problem

I'm not that concerned as it's only a pittance for most accounts with interest rates being so low but it does make my tax returns incorrect as I don't get the full credit for the DIRT they deducted but only get the reduced rate - again not significant for me, but still wrong
 
PTSD credited me with my 4c on December 31st. They posted a DIRT deduction of .01c but l can't figure out the rate!
 
Permanent TSB rang back and their explanation is that they calculate the interest earned, the DIRT payable and the net interest after close of business on the 31st December but they cannot post these amounts to my account until the next working day ie 2nd January.

I said I do not agree with the way they handle this, they noted this feedback and wished me a Happy New Year!
 
jpd said:
Permanent TSB rang back and their explanation is that they calculate the interest earned, the DIRT payable and the net interest after close of business on the 31st December but they cannot post these amounts to my account until the next working day ie 2nd January.

I said I do not agree with the way they handle this, they noted this feedback and wished me a Happy New Year!
Click to expand...

<Ahem>

EmmDee said:
Is the €100 interest not related to 2019 calculated on last day of 2019 - just posted to your account on the first day of 2020
Click to expand...

Calculated and generated after EOD on 31st - entries passed but shows on your statement SOD 2nd Jan

They've paid it 31st - you see it 2nd
 
RedOnion said:
'After' is the key word here. They posted it on the 2nd. They should have used 2020 DIRT rate in my opinion.
Click to expand...

"After COB" is still in 2019 seems to be the view of the bank - which I know from wider banking would be pretty standard. Batch jobs running interest and other postings after COB are doing it for that "business day"

Your opinion may or may not be valid - but it doesn't really influence anything. I'm just stating the reason why a certain rate was applied.
 
RedOnion said:
It sounds to me like you are 'stating' an opinion as to what happened. ;)
Your opinion of course may also be valid.
Click to expand...

Lol - true.

But I work for a large global bank and run a business that posts to clients in a similar manner and have some knowledge of the platforms and how they work. I'm just describing the practical processes. But you may be joining my French colleagues as they debate - That's all very well in practice but does it work in theory? ;)
 
The DIRT is payable on interest earned in 2019. In my opinion the applicable DIRT rate is the one for 2019. With respect to a tax return, I believe the same would be true for income. If a PAYE employee receives payment for their December 2019 salary on the first work day of January 2020, that is 2019 income and not 2020.
 
I had this happen to me a few years ago when DIRT was going up. All of my interest was accumulated at a lower DIRT rate but because they paid me the interest a few days into the new year, I was charged the higher rate.

Was not too pleased at the time!
 
You must log in or register to reply here.
Back
Top