High Court Rules NPPR IS Tax-Deductible

I am not well up with tax rules and my accountant didn't claim the expense. However at the end of year 1, I paid stiff penalties for failing to pay NPPR on a property let in 3 units as I had definetly read somewhere on a government website that it was per house and not per unit. I think everybody should claim back the NPPR for all the years 2009 onwards as its a Revenue error and they should have to make allowances for this. Where could we find out if we can make allowances for this NOw.
 
Meath Lady you are making a mistake, it was always clear to me the NPPR was per unit and not per property. So it was for landlords like me a significant annual charge.

Your accountant was correct not to claim it.

In my case, my accountant advised me off the revenue stance and guidance and I said I accepted his advice and was going against it, as is my perogative as its my tax return. It is not for the fact hearted to claim it, but I felt more than able to challenge revenue on it if they audited me.
 
Sarenco said:
Well, the cost has to relate to the "...management of the premises borne by the person chargeable and relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received".

LPT is not an expense that relates to or constitutes an expense of "the transaction or transactions under which the rents or receipts were received". LPT arises even if no rent is ever sought or received in respect of the particular premises.
Click to expand...

So does a service charge on an apartment to be fair, and that's deductible.
 
Sarenco said:
I don't agree that it's "beyond question". At best it's arguable.

Here's the key conclusion from the judgment:-

"It is clear from the legislation underpinning the NPPR that the charge is constructed in a way expressly designed to ensure that the revenue achieved is attributable entirely to the local authority. It mandates that the collected funds are steered in one direction only – locally and away from central government. To conclude in these circumstances that the charge is in reality a national one, as contended by the appellants, would be contrived and artificial and contrary to the intent of the statute (namely the Local Government (Charges) Act, 2009). The legislature is the architect of a framework specifically engineered to ensure the resulting revenue stream flows directly into the coffers of the local authority. If anything, central government is deliberately bypassed to allow local authorities to be the collectors of the generated proceeds and are indeed empowered to prosecute defaulters. The government’s involvement is effectively to design and sign off on a system which takes it out of the loop and distances itself from what to all intents and purposes is a tax or charge levied by the local authority."

1. Is LPT "constructed in a way expressly designed to ensure that the revenue achieved is attributable entirely to the local authority"? No.
2. Is LPT "steered in one direction only – locally and away from central government". No.
3. Is LPT "specifically engineered to ensure the resulting revenue stream flows directly into the coffers of the local authority". No.
4. Are local authorities "the collectors of the generated proceeds". No.
5. Are local authorities "empowered to prosecute defaulters". No.
6. Is LPT "to all intents and purposes is a tax or charge levied by the local authority". No.

I certainly agree that LPT should be deductible but it's a bit of stretch, in my opinion, to suggest that this judgment puts the issue "beyond question".
Click to expand...

I'm not still up to clear on my thinking on this, but two things Spring immediately to mind:

1. who gets the money, isn't it the city/county authority?
2. The local authorities have some power over how much is charged. So much so that the entire country has different 'rates' depending on what they decide.
 
Last edited:
Thanks Bronte. I know I definitely read somewhere in Year 1 that it was per property and not per unit, but could never find it again. I thankfully only had to pay the penalties for I year on two units and learnt my lesson the hard way. I therefore ensured that when it came to property tax that I had it in writing it was per house and not per unit in case anything changed. Fair play to you Bronte.
However do you think there would be a problem offsetting this back charge this year for years from 2009 as Revenue made the error .
 
Meath Lady, it's entirely possible that at some point you read that. And revenue can and do make mistakes, especially when it's a new tax rule. I went into them on something after a budget years ago and proved they were wrong. Mortgage interest if I remember correctly.

And like you at some stage I think there was discussion about units for the LPT on here.

About back claims, accountant, Tommy says no, only 2013. But another poster suggests there is some hope. This isn't over for you not yet.

If that is correct I'd be amazed if revenue didn't appeal this case. We are talking serious money precisely because it was per unit and not per property.
 
Last edited:
Meath Lady said:
Thanks Bronte. I know I definitely read somewhere in Year 1 that it was per property and not per unit, but could never find it again. I thankfully only had to pay the penalties for I year on two units and learnt my lesson the hard way. I therefore ensured that when it came to property tax that I had it in writing it was per house and not per unit in case anything changed. Fair play to you Bronte.
However do you think there would be a problem offsetting this back charge this year for years from 2009 as Revenue made the error .
Click to expand...

Forgot to say ouch, that it was penal in the extreme, especially as many people, especially those abroad, didn't know anything about it.
 
Last edited:
Bronte said:
1. who gets the money, isn't it the city/county authority?
Click to expand...

No, it's collected by Revenue and goes to the central exchequer in the first instance.

Bronte said:
2. The local authorities have some power over how much is charged.
Click to expand...

Yes, in 2015 local authorities were given the power to increase or decrease the amount levied centrally by up to 15%. It's worth noting that local authorities themselves are liable to pay LPT.
 
Why is it called 'local'

What was its purpose? Who ultimately gets the money?

Why does the local authorities have a say on the percentage?
 
Last edited:
http://www.courts.ie/Judgments.nsf/...c4a8cfe246ded89c802580a4004101d7?OpenDocument

Summary

Thomas Collins a landlord of six properties argued with revenue that NPPR should be tax deductable. He went all the way to the top of their procedures to the Appeal Commissioner who agreed with him, that NPPR is a rate and therefore allowable.

The NPPR Charge ia a rate levied by a local authority ... the ordinary meaning of 'any rate levied by a local authoirty, includes the Charge.

Revenue weren't happy with this, so they appealed it. Which means the High Court.

Revenue argued the Charge was not a rate.

Collins had two arguments.

1. The Charge is a rate
2. Double taxation - he lost on this and I'll not go into it.

Court decided that the ordinary meaning of 'any rate levied by a local authority' must be given it's ordinary meaning as a member of the public would understand it and therefore the Charge is a rate.
 
Last edited:
THE POWER OF REVENUE

Tomas Collins is a landlord, like many of us on here, just ordinary mere folk. He was very brave to go to the AC. Which is a free procedure and you can represent yourself. I presume though he had his accountant with him. It's the end of the line for decisions with revenue. Except then the next level of appeal is a whole different ball game.

It is likely Collins would have accepted the AC's decison if it had gone against him. As what mere tax payer would risk a High Court challenge. But revenue operate under no such restrictions.

Which I consider to be an abuse of power. I'd like other posters views on that.

I'd also like to acknowledge that Thomas Collins is a very brave man who must have had very many sleepless nights. Can you just imagine ending up in the High Court against an organisation as large as Revenue, which even the very mention of it's name sends shivers down the spine of most people.
 
WHY DID REVENUE NOT NOTIFY TAX PRACTICIONERS OF THE AC'S DECISION

The AC decided for Collins in 2013. Meaning that every single other tax payer could have been made aware that Revenue were wrong. Or even that there was now a major doubt on Revenue's 'guidance/rules/opinion' of whether the NPPR is tax deductable. And our accountants could have told us taxpayers to put it into our return, including backdating it to when it began in 2009 under the four year tax limit.

Do Revenue not have an obligation to taxpayers when such a situation arrises on such a major issue. Remember for Collins it was six properties, so an annual hefty €1,200 not deductable over quite a number of years.

Then we get to 2016. November. Even then Revenue could have notified practicioners, and landlords would be able to claim it back for two years. But nothing from them.

(Tommy how did you get to hear of the court case?)
 
If the Appeal Commissioner agreed with Mr Collins, then it should be up to them to fight his case in any court, and not an ordinary member of the public.

In terms of balancing the scales, in the US this likely would have been pursued as a class action suit... Clearly there were enough landlords here who would have pursued that approach collectively - we need better legislation to enable such actions.
 
You must log in or register to reply here.
Back
Top